The Mortgage Market
The Dubai mortgage market has evolved significantly over the years. Being a traditional Islamic country the mortgage model took some time to mature and cater to buyers from all over the globe.
Dubai now offers lending to residents and non-residents from large, established lenders and high street banks, including high street names such as HSBC, Emirates NBD, Dubai Islamic Bank and more.
The criteria required by lenders depend on the product being provided, typically minimum balances, salary coming into your bank account and your age are the most crucial factors.
Some lenders and products are more lenient than others and both salaried individuals and self-employed business owners can secure lending, however, knowing what lenders to approach and what lending products would be most suitable should be left to qualified, experienced mortgage brokers.
Deposit levels for local nationals are typically in the region of 20%, whereas non-residents will typically need a minimum of a 40% deposit, applicable to the overall property value. The length of the mortgage is typically 15 to 25 years, with attractive interest rates available, and Sharia-compliant options.
As a side note, if you’re open to off-plan property investing it can be a great chance to secure a payment plan direct from a developer. This means no credit checks will take place best of all there is no interest.
These will be over short timeframes compared to mortgages, typically 2-8 years in the current market conditions, although this can vary.
The way it works is that when you purchase a property on the primary market (direct from a property developer) you will have an agreement with them outlining the repayment terms which you will sign and agree to, it’s a much smoother and simple process in comparison to mortgages but it doesn’t allow your capital to be stretched as much.
Why us a mortgage?
Investors should consider using a mortgage to purchase properties in Dubai due to several benefits:
Leverage: A mortgage allows investors to acquire a property with a smaller initial investment, enabling them to potentially achieve higher returns on their investment as property prices appreciate over time.
Affordability: By spreading the cost of a property over a longer period, mortgages make purchasing real estate more affordable, allowing investors to enter the Dubai property market without having to pay the entire property value upfront, which can open up more options.
Flexibility: Mortgage providers in Dubai offer a wide range of products with varying interest rates, terms, and repayment options, enabling investors to choose a mortgage plan that suits their financial needs and objectives.
Asset diversification: Using a mortgage to buy properties in Dubai can allow investors to diversify their portfolio by investing in multiple assets simultaneously, spreading risk and potentially increasing overall returns.
Cash flow management: A mortgage provides the advantage of better cash flow management by enabling investors to make smaller, regular payments over an extended period, as opposed to a significant lump-sum payment.
The Next Steps
Should you wish to leverage with finance for your property purchase in Dubai, we can introduce you to reputable mortgage brokers who will discuss your personal circumstances and then relay the best options to you, giving you an in-depth understanding of all the financials and intricate details. Please click one of the contact methods below to submit your interest in speaking to a mortgage broker and/or discussing our projects with long-term interest-free payment plans available.