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What to Look For When Choosing a Dubai Mortgage

Holo Blog

If you're thinking about buying a new home in Dubai or the UAE then you'll likely need a mortgage. It's a common misconception that your bank will offer you the mortgage and rate best for you, but that's not true. Holo works with all the UAE's banks and has access to over 500 mortgage products. Here our Holo mortgage experts share the things you should look for whether you are looking for a mortgage as a resident or a Dubai mortgage for non-residents.

1) Finding a mortgage broker in Dubai

Consulting a mortgage advisor is a good idea when you are seriously considering buying a property. A great mortgage advisor or broker will capture your needs and seek to learn more about what you need and want from your mortgage. They'll want to understand your income and outgoings, where you're thinking about buying, and ask you questions to ascertain your affordability.

Having someone ask you the right questions at the beginning of your home-buying journey as well as answer your home mortgage questions will help shape your understanding of the market, giving you confidence and insight into what can sometimes be a confusing process.

A mortgage broker will typically charge you between AED 2,000 and AED 5,000. If you're put off by the prospect of adding additional fees to cover the costs of a mortgage broker, then why not start by using a mortgage calculator in Dubai?

Using an online mortgage platform like Holo is 100% free. Our mortgage calculator will capture all the essential info we need from you. We have access to over 500 mortgage products from all the UAE's banks, and in less than two minutes, we'll give you a selection of products that match your profile.

We know that you'll need reassurance that the recommendations we make are right for you, and you might have questions about the process. A good mortgage advisor should give you expert and honest mortgage advice you can trust, so at this point, one of the Holo team will contact you and walk you through everything you need to know. Remember, we're free, we don't charge you anything.

2) Shop around for the best rate

You may think that you should make your application for a mortgage with your bank. But there is no guarantee your bank will be able to offer the best rate or products for you. That's why it's a great idea to shop around.

There are hundreds of mortgage products out there and researching your options will take time. Using a digital mortgage platform like Holo will save you time as well as money. We'll search all the mortgages from all the banks on your behalf. We've got access to fixed and variable rates on different term lengths as well as conventional and Islamic mortgages.

When you know what your options are, you can make the decision that's best for you and your circumstances.

Top tip: Dubai mortgage interest rates are on the rise so pay attention to what's happening in the market overall.

3) To fee or not to fee

There are fees associated with buying a property and you'll need a down payment. Your down payment should be at least 20% if you're an expat, and 15% if you're a UAE national if the property you want to buy is less than AED 5 million. Your down payment will be more if the property is more than AED 5 million. You'll need a 30% down payment as an expat and 25% down payment in this case.

On top of the down payment, there will be fees to be paid. These fees are mandatory and cover the valuation of the property, the cost of your real estate agent, the registration of the mortgage, the bank's processing fee, trustee fees, and a fee paid to the DLD (Dubai Land Department).

While you can not borrow your down payment, you can choose to add the costs of your fees to your Dubai mortgage. This means lower costs upfront, but you may get a higher interest rate.

Get an understanding of the mortgages on the market that enable you to include fees and those that don't. You can then compare the interest rates and monthly repayment amounts and make an informed decision.

4) Salary transfer

Some banks will make salary transfer a condition of your mortgage offer. This means that they will want you to ensure that your salary is paid into a bank account with them. This may mean more paperwork for you in terms of setting up a new bank account and changing banking instructions with your employer. Some employers may have specific banking relationships for salary payments in place.

For many applicants, this may not be a deal breaker. Nonetheless, it's a good idea to be mindful that this could be a condition of your mortgage acceptance so that you can allow yourself time to make any necessary admin arrangements.

5) A conventional or Islamic mortgage

With a conventional mortgage, the bank will lend you the money to finance your new home. The mortgage consists of the loan for the amount you wish to borrow, and an interest rate applied to the loan amount. An Islamic mortgage is a Sharia compliant way of financing the purchase of a property. Under Sharia Law banks are forbidden from charging interest on a loan.

An Islamic mortgage is for everybody, you don't need to be Muslim. They simply offer a Sharia compliant way of buying a home. As with any mortgage, you should take the mortgage that offers the best rate for you, your goals and your circumstances.

Remember Holo is here to ensure you have all the information you need to make the right choice. Let's get you started for free.

This blog is for educational purposes, but everyone's case is unique, and local guidelines and regulations may change. Our mortgage advisors can help you with any question you may have and have the latest advice. Get in touch.

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