Mortgage Rate Comparison by Country for Dubai Property Investors

  • April 14, 2018

Before plunging into any investment, the 3 things that an investor desires are high returns, low risk and ease of financing. Residential real estate goes a step further from financial products. It involves - hold your breath - an emotional aspect for the buyer as well as the seller. Often, one of or both the parties will have some sort of connect with the property. It may be location (bringing nostalgia, ease of access to desired places), the layout (Asians can be sentimental about cultural beliefs) or the timing (for a family moving on to new life events). The value of a property has all these factors embedded in it, often not stated by either of the stakeholders. A good real estate agent will possibly extract these finer details and position it accordingly during price negotiation, to both parties. Once closure happens, the buyer should be ready with the financing plan to purchase the property.

In Dubai, a majority of its residents are expats from South East Asia, UK, USA, Canada and other countries. How do they make a quick decision on what is the best way to purchase a villa or a townhouse, especially in a premium neighborhood with all the preferred amenities? There are so many aspects to consider. Will they be living in the city for a long time? Do they plan to bring their family during the entire tenure of the contract? Are they going to pull out from their savings to buy a house in Dubai? Are they going to rent out the place for a regular income? Will they invest to reap higher returns during realty booms? Probably the answer is “Yes” to at least one of these questions and probably some “Yes”es to obtaining mortgages for investing in a home. For those interested to get a mortgage we will explore options by comparing mortgage rates in UAE vs. top expats’ countries.

What is mortgage? A borrower can utilize Variable or Adjustable rate mortgages (ARM) and fixed rate mortgages for obtaining loans from financial institutions after providing a down payment to buy a residential property. Different dominions have variance in pricing and percentage of down payment to approve a borrower.

Adjustable rate mortgage (ARM) pricing is cheaper sometimes if the federal interest rates are low and projected to be low for quite some time. However, if the central bank of a country raises the rate, and if they do that rapidly over a few quarters, monthly EMIs are expected get a huge bump.

Here is a look at the mortgage rates of top countries from where expats arrive in Dubai.






10 years to 30 years, rates ranging from 4.1% to 4.5%

(US Bank rates)

3 years to 10 years, rates ranging from 3.5% to 4.1%

Jumbo loans, with loan value of $450,000 and above, requires 20% down payment


1-10 years, rates range from 3% - 6%

(TD Canada Trust)

5 year closed - 3%

5 year open - 4.6%

Open mortgages allow you to pre-pay the principal amount without any fees/penalties


2 year standard - 4%

5 year standard - 4%

(HSBC rates)

2 year - 4%

Down payment of 10% and loan value should not exceed 400,000 pounds

Initial interest rate is around 2% and after the 2 years, variable rate kicks in for the duration of the term loan


11.75% - 20 years

(Axis Bank rates)

8.35% up to ₹3,000,000 and 8.7% for loans above ₹7,500,000 loan amount

 For salaried individuals rates are lower compared to self-employed.


3.5% - 4.5% for 2 years

4.75% - 5% for 5 years


Minimum salary is AED 15,000/month

Max finance amount is 15,000,000 AED

Flat rate - 2% and reducing rate is  3.75%

(ADIB home finance rate)

Rates and down payment requirements are higher for expats (25%) compared to the UAE nationals.

In Dubai, there is a 4% transfer fee and mortgage registration fee of 0.25%. There is a 2% real estate commission, a valuation fee and loan establishment fee of up to 1% of the loan amount as well (applicable to other emirates as well such as Abu Dhabi).

In the end it is really upto the borrower to negotiate the terms of the loan and these rates are not set in stone and are always open to negotiation. Shop around and compare the features (processing fees, pre-payment conditions, switching fees from fixed to variable or the other way around, mortgage closure costs at the end of the term, switching fees for moving to another bank and whether the other bank will pay these fees). Almost every bank has different rates for first time home buyers.

If you need more expert advice, talk to one of our advisors who will provide you with insights on house purchasing process to buy your most wanted home in one of Dubai’s elegant neighborhoods.