UAE mortgage terms, in plain English.

The mortgage world is full of jargon. Here are the terms that come up most often when financing a home in the UAE — explained simply. Not sure about something? Ask our advisors or Mr Mortgage in the corner.

Loan-to-Value (LTV)

The share of a property’s value you borrow. UAE residents can typically borrow up to 80% on a first home under AED 5M (75% above); non-residents usually 50–75%; off-plan around 50%.

Debt-Burden Ratio (DBR)

The portion of your monthly income taken up by debt repayments. The UAE Central Bank caps it at 50% — including loans, 5% of your credit-card limits, and the new mortgage payment.

EIBOR

The Emirates Interbank Offered Rate — the benchmark UAE banks lend to each other at. Variable mortgage rates are usually set as EIBOR plus a fixed margin, so they move with EIBOR.

Stress rate

A higher interest rate (commonly around 6.25%) that banks use to test whether you could still afford the mortgage if rates rose. Your approved amount is based on this, not today’s rate.

Pre-approval

A lender’s in-principle confirmation of how much you can borrow, before you find a property. It lets you negotiate with confidence and usually takes a few days.

Fixed-rate mortgage

A mortgage where the interest rate is fixed for an agreed period, giving predictable monthly payments before it reverts to a variable rate.

Variable-rate mortgage

A mortgage whose rate tracks a benchmark such as EIBOR, so your monthly payment can rise or fall over time.

Offset mortgage

A mortgage linked to your savings or current account; the balance held there offsets your loan, so you pay interest only on the difference.

Interest-only mortgage

A mortgage where, for a set period, you pay only the interest and the loan balance stays the same — lower monthly payments, with a clear repayment plan needed later.

Buyout / Refinance

Moving your existing mortgage to a new bank — usually for a lower rate or to release equity. Also called a balance transfer or remortgage.

Equity release (top-up)

Borrowing more against a property that has risen in value, taking the difference as cash for renovations, another purchase or other needs.

DLD transfer fee

The Dubai Land Department’s property transfer fee — 4% of the price in Dubai. Other emirates charge different rates (around 2% in Abu Dhabi, Sharjah and RAK).

Mortgage registration fee

A fee to register the mortgage with the land department — 0.25% of the loan amount plus a small admin charge in Dubai.

NOC (No Objection Certificate)

A certificate from the developer confirming there are no outstanding dues on a property, required before ownership can transfer.

MOU (Form F)

The Memorandum of Understanding — the sale agreement signed between buyer and seller setting out the terms of the purchase.

Final offer letter

The bank’s formal mortgage offer, issued after valuation, confirming the loan amount, rate and terms.

Valuation

The bank’s assessment of a property’s market value, used to confirm how much it will lend. Typically costs around AED 2,500–3,500.

Title deed

The official document proving ownership of a property, issued by the land department once the transfer is complete.

Freehold vs leasehold

Freehold means you own the property and the land outright (available to expats in designated zones). Leasehold or usufruct grants rights for a long period rather than outright ownership.

Amortisation

The gradual repayment of a mortgage over its term, where each payment covers interest and part of the principal until the loan is cleared.

Tenure

The length of the mortgage. UAE loans run up to 25 years, and must be repaid by a maximum age of 70.

Early settlement fee

A charge for repaying your mortgage early or switching lender, capped by the Central Bank at 1% of the outstanding balance or AED 10,000, whichever is lower.

Islamic home finance

Sharia-compliant alternatives to a conventional mortgage, such as Ijara (lease-to-own) and Murabaha (cost-plus), where the bank earns a profit rate rather than interest.