How to Finance a Property Purchase in Dubai: A Complete Guide (2025)

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финансиране на имот в Дубай

Acquiring property in Dubai is a dream for many investors, but how exactly does the financing happen? The city offers exceptional potential, but understanding the mortgage options in Dubai and the specifics of buying off-plan property is the key to a successful transaction.

This guide will take you step-by-step through the entire process – from bank requirements to hidden costs.

Main ways to finance a property in Dubai

  1. Own funds (Cash):
    • Advantages: the fastest way. You avoid interest and banking procedures, giving you a strong negotiating position.
    • Cons: Requires a large initial capital.
  2. Mortgage loan from a bank in the UAE:
    • This is the most common and affordable method of financing a property in Dubai for expats.
  3. Payment plans from the builder(in case of off-plan purchase):
    • A very attractive option where the builder offers flexible plans, staggered over a number of years, sometimes even after handover of the property.

Dubai Mortgage for Expats: A Detailed Guide

Getting a mortgage as a foreigner is perfectly possible, but requires preparation.

Basic requirements of banks:

  • Proof of income: banks require payslips, bank statements (for the last 6 months) and an employment contract. Audited financial statements are required for business owners.
  • Debt-to-income (DTI) ratio: your monthly payments on all loans (including the new mortgage) should not exceed 50% of your net monthly income. This is a strict rule of the UAE Central Bank.
  • Minimum income: most banks have a minimum monthly income requirement (e.g. AED 15 000 – AED 25 000).

Mortgage terms:

  • Loan-to-Value (LTV):
    • For foreigners (non-residents): LTV up to 50%. A minimum of 50% deductible is required.
    • For foreigners (residents):
      • For a first property under AED 5 million: LTV up to 80%.
      • For first property over AED 5 million: LTV up to 70%.
      • For a second (or subsequent) property: LTV up to 60%.
  • Loan term: usually up to 25 years.
  • Interest rates: can be fixed (for 1-5 years) or variable (linked to EIBOR).

Mortgage application process:

  1. Pre-approval: get it before you look for a property so you know your budget.
  2. Property selection and formal application: you submit the full set of documents.
  3. Property valuation: the bank appoints a valuer (the fee is AED 2,500 – 3,500 and is paid by you).
  4. Final Approval and Signing: After all checks, the contract is signed before DLD.

Leading banks offering mortgages for foreigners: Emirates NBD, Mashreq, HSBC, Standard Chartered, ADCB, FAB.

Off-Plan Purchase Financing

Here you have two main options:

  1. Payment plans from the builder: the most popular method.
    • Down payment: 10-20% upon reservation.
    • Instalments during construction: staggered payments linked to construction phases.
    • Last payment on handover: the balance is payable on completion. Here you can use a mortgage to cover this amount.
    • Post-Handover Plans: some builders allow you to pay part of the amount in instalments over 1-5 years After after you have received the keys.
  2. Mortgage for off-plan properties: banks usually grant a loan once the project reaches a certain percentage of completion (e.g. 50%).

Additional costs (apart from the property price)

Be prepared for additional costs of about 8-10% of the property value:

  • Transfer fee to DLD: 4% of the property value.
  • Broker commission: 2% (+ 5% VAT on commission).
  • Mortgage registration fees: 0.25% of the loan amount.
  • Assessment fees, administrative fees, etc.

Final tips for foreigners:

  • Start early: the mortgage process takes 1-3 months.
  • Use a mortgage broker/credit counsellor: He will compare offers from different banks and save you time and money.
  • Prepare the deductible: make sure you have the necessary own funds plus the additional 8-10% for fees.

Conclusion

Financing a property in Dubai as a foreigner is perfectly feasible, thanks to a well-developed banking system and flexible options from developers. With good preparation and an understanding of the requirements, you can successfully invest in one of the most dynamic real estate markets in the world.

This post is also available in: Български

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