How to Cover Additional Fees When Buying a House in the UAE

So you've found your dream home in the UAE and secured your mortgage approval. Great news! But wait - what about those additional mandatory fees that are no longer covered by your mortgage? With recent regulatory changes in the UAE, homebuyers now face the challenge of covering significant upfront costs separately from their mortgage.

In this article, we'll break down what the mandatory property buying fees in the UAE are, why they're no longer covered by mortgages, how you can reduce them, and what steps you can take to better prepare for a smoother home-buying experience.

What Are the Mandatory Fees When Buying a Property in the UAE?

When you buy a home in Dubai you'll encounter several non-negotiable fees that are required by law or industry practice. These include:

Dubai Land Department (DLD) Fee

• 4% of the property value
• Paid to the government to register the property in your name

Real Estate Agent Commission

• Usually 2% of the property price
• Paid to the agent or broker managing your transaction

Trustee Fees

• Around AED 4,000 to AED 5,000, depending on property value
• Paid to the DLD-approved trustee office handling the title deed transfer

Property Valuation Fee

• Typically AED 2,500 to AED 3,500
• Required when applying for a mortgage

Mortgage Registration Fee

• 0.25% of the loan amount, plus AED 290
• Paid to register your mortgage with the DLD

These costs can quickly add up to 6 - 8% of your property price. So, for a home worth AED 2 million, you could be looking at AED 120,000 to 160,000 in fees, on top of your down payment.

Why Are These Fees No Longer Covered by Mortgages?

In the past, some banks in the UAE allowed buyers to include these additional fees as part of the overall mortgage package. This meant you could roll those costs into your loan, making it easier to manage upfront expenses.

However, recent regulatory changes have closed that option. The UAE Central Bank now requires:

• Clear separation of property purchase price and associated fees
• Mortgage loans strictly for the property itself
• All additional fees to be paid separately by the buyer
• Higher down payment requirements from buyers' own resources, not other borrowing

These changes promote responsible lending but create a new challenge: how to cover these substantial upfront costs without depleting all your savings.

Option 1: Use Personal Finance to Cover Fees

One of the most effective ways to manage these extra costs is to apply for personal finance (i.e., a personal loan) to cover the DLD fee and agent commission.

How It Works

• You apply for a personal loan with selected banks in addition to your mortgage
• The loan amount is calculated to match the fees you need to pay
• Repayment is structured in monthly installments over 1 - 4 years

What It Can Cover

• DLD fee (4%)
• Agent fee (2%)
• Trustee and admin fees

Benefits

• Reduces upfront cash required at the time of purchase
• Can come with preferential terms when bundled with your mortgage
• Fixed monthly payments make it easier to budget
• Can be processed quickly alongside your home loan

What to Consider

• Subject to eligibility: Your income, existing debts, and credit score matter
• Interest rate applies: Usually higher than mortgage rates, but still manageable
• You'll need to ensure total debt burden ratio (TDBR) remains under regulatory limits

If you qualify, this is a smart solution to help you secure your home without draining your savings.

Option 2: Use Credit Card Offers to Ease the Upfront Burden

Some banks now offer credit cards with exclusive benefits when you take a mortgage with them. These cards can be used strategically to cover some of your fees or ease your cash flow.

How It Works

• You apply for a credit card when finalizing your mortgage
• The bank may allow you to pay certain fees on the card
• Some cards offer 0% installment plans for 6 - 12 months

Benefits

• Spreads payments over time, reducing initial financial pressure
• May come with cashback, welcome bonuses, or fee waivers
• Can be used immediately for DLD or agency fees

Points to Watch

• Subject to approval and credit limits
• High-interest charges apply if not repaid within the promo period
• May not cover all fees, only a portion

This option is useful if you're confident in managing credit responsibly and want short-term flexibility.

Other Tips to Reduce Your Upfront Costs

Even beyond financing, there are several things you can do to minimize the cash you need on hand:

Budget Ahead of Time

• Estimate all your fees early in the process (use a mortgage calculator)
• Aim to have at least 6-8% of the property value ready in cash

Look for Developer Incentives

• Some developers offer fee waivers, rebates, or limited-time promotions to help with closing costs

Planning ahead and knowing your options gives you time to save money and avoid surprises.

We Work With Lenders Offering These Solutions

At Holo, we understand that upfront costs can make or break a property deal. That's why we partner with a wide range of lenders across the UAE offering tailored financial products designed to help home buyers like you.

Many of our lending partners offer:

• Bundled personal finance solutions with your mortgage
• Credit card offers that can help reduce your out-of-pocket fees
• Preferential interest rates and flexible repayment plans

Our mortgage brokers will help assess your profile, compare options, and guide you to the best setup

Conclusion

The recent changes in UAE mortgage regulations have created new challenges for property buyers, but they don't need to be roadblocks on your path to homeownership. By understanding your options for covering mandatory fees - whether through personal finance, credit card solutions, or a combination of approaches - you can develop a strategy that works for your financial situation.

With careful planning and the right financing tools, you can successfully manage the additional mandatory fees and continue your journey to owning property in the UAE.