Mortgage Calculator For Property in Dubai

There are many reasons why people are attracted to mortgage financing in the United Arab Emirates. First, the UAE is tax-free, with a stable economy and strong currency. Additionally, the UAE offers a wide variety of mortgage products and services, which makes it an attractive option for those looking to finance their home.

Mortgage financing in the UAE can be used to purchase a primary residence, a second home, or an investment property. Various mortgage products are available, including fixed-rate mortgages, adjustable-rate mortgages, and interest-only mortgages. Mortgage financing in the UAE is also available for multiple terms, including short-term, medium-term, and long-term loans.

What is a Mortgage Loan?

A mortgage loan is a loan secured by a property – typically, a residential property – that the borrower is obliged to pay back, usually for years. The interest rate on a mortgage loan is generally lower than the interest rate on other types of loans, such as personal loans or credit cards, because the lender knows that if the borrower defaults, they can sell the property to recoup their money.

Types of Mortgages

Many different types of mortgage products are available in the UAE, each with its own benefits. The most popular types of mortgages in the UAE are:

• Fixed-rate mortgages: offer stability and certainty, as the interest rate is fixed for the entire loan term. However, borrowers may pay more interest if rates fall during the loan term.
• Variable rate mortgages: These products offer more flexibility, as the interest rate can fluctuate over the loan term. This means that borrowers could end up paying less in interest if rates fall, but they could also pay more if rates rise.
• Tracker mortgages: These products track the movements of the UAE Central Bank's benchmark interest rate. This means that borrowers will always know how much their monthly repayments will be, as they will fluctuate in line with changes in the benchmark rate. However, tracker mortgages typically have higher interest rates than fixed or variable-rate products.
• Islamic mortgages: These products comply with Sharia law and are therefore popular with Muslim borrowers. Islamic mortgages typically involve the concept of "murabahah", where the lender buys the property on behalf of the borrower and then sells it to the borrower at an agreed-upon price, plus a profit margin.
• Offset mortgages: These products allow borrowers to offset their savings against their mortgage balance, which can help to reduce the amount of interest paid over the life of the loan. However, offset mortgages typically have higher interest rates than other types of mortgages.

Mortgage Financing in the UAE

As the UAE’s economy grows and thrives, countless professionals from around the world seek residence in its most flourishing cities. In fact, real estate mortgages in Dubai and Abu Dhabi have exponentially increased in the past decade. This trend seems to be fueled by rising rents, as Dubai residents apply for real estate mortgages with the aim of acquiring their residence.

Both locals and foreigners can get a mortgage in the UAE after meeting certain criteria, and mortgages are available at a fixed rate or variable rate basis. A mortgage can be acquired either directly through a bank or a broker. Doing your research and seeking the right assistance will help you make an informed decision.

This is where a Dubai housing loan calculator or a home loan calculator can come in handy. By inputting a few key values, you can have a realistic idea about your real estate mortgage payments, to better plan for your future.

How to Use the Dubai Mortgage Calculator

Driven Properties takes good care of its customers and goes out of its way to enhance their convenience and ease. Along with offering the most luxurious real estate solutions and most beneficial mortgage rates, it also helps you calculate your mortgage with immense ease.

We have taken it upon ourselves to develop an accurate home loan calculator for Dubai, to help you acquire a clear picture of what to expect in terms of mortgage payments.

Here is how you can use the Dubai – UAE mortgage calculator:

1. Enter the property value in the "Property Value, AED" field.
2. Enter the term of your loan in the "Repayment Period, Years" field. (up to 25 years)
3. Enter the interest rate for your loan in the "Current Interest Rate, %" field.
4. Enter the % or amount of the down payment in the "Down Payment, AED" field. (At least 15% for UAE nationals and 20% for ex-pats)
5. Click the "Calculate Mortgage" button.

Your monthly payment will be displayed in the "Monthly Payment" field.

Aside from the Dubai Mortgage Calculator, you can get free advice from seasoned real estate agents to get a clearer idea of how to proceed.

Find the Best Mortgage Rates

Comparing and contrasting the different interest rates, down payments, and installments offered by various financing institutions in the UAE can be a daunting task. But worry not, our experts are here to lend a helping hand. At Driven Properties, we haven’t only developed a UAE mortgage calculator to compare the offers you have received from different banks; we also provide advisory services. So, feel free to use our reliable tool in your quest to find the right mortgage for you. Alternatively, you can look for solid advice, rooted in years of mastery to help you make a decision.

Key Terms of Mortgage Finance

Understanding key terms can help you better understand the mortgage loan and its processes. Let's take a brief look at each of these terms:

1. House Loan Calculator

Property Mortgage Calculator is often referred to as House Loan Calculator or Housing Loan Calculator. It helps you determine the price of your desired property as per your loan period, interest, and down payment.

2. Price

During the mortgage process, the term "price" always refers to the property's value in consideration.

3. Down Payment

It is the amount that the loan applicant has to pay upfront to acquire the property. The required down payment generally is 15% or more for UAE nationals and 20% or above for expats.

4. Mortgage Amount

The mortgage amount is the total loan that the financial institution or developer sanctions. For UAE nationals, the mortgage amount can go up to 85% of the property price, while for expats, the maximum loan percentage is 80%.

5. Interest Rate

Interest rate, or mortgage rate, is the percentage of interest charged against the mortgage amount.

6. Loan Term

The loan term refers to the total number of years the loan has to be repaid. It can also be understood as the life of the loan. In the UAE, financial institutions offer loan terms of up to 25 or 30 years.

7. EMI

They are also called monthly mortgage payments, installments, or just monthly payments. This refers to the amount you have to pay each month and includes the principal amount, interest, and in many cases, property tax and insurance premiums.

8. Terms and Conditions for Mortgage Loan

The Terms and Conditions for Mortgage Loan in the UAE are as follows:

1. The mortgage loan must be used for the purchase of a property in the UAE.
2. The loan must be repaid within a maximum period of 25 years.
3. The loan must be repaid in full if the property is sold or transferred to another person.
4. The interest rate on the loan is fixed for the duration of the loan period.
5. The loan must be repaid in full if the borrower dies or is declared bankrupt.
6. The lender has the right to repossess the property if the borrower fails to repay the loan.

Frequently Asked Questions

1. What is the longest mortgage term you can get in the UAE?

The longest mortgage term in the United Arab Emirates is 25 years; or up to the age of 65 for employees who receive fixed salaries, or 70 years of age for freelancers and self-employed individuals.

2. How much do I need to earn to get a mortgage loan?

To be eligible for a mortgage loan in the UAE, a national must earn at least AED 10,000, while a resident’s earnings must amount to AED 15,000. Expats must be employed for no less than 3 years, with 1 year spent in their current job.

3. How do I figure out how much I can borrow for a home loan?

The Central Bank of the UAE has set two main criteria that govern the amount an individual can borrow in a home loan.

• The mortgage amount cannot exceed 7 folds the annual income.
• All liability payments must be no greater than 50% of your monthly salary. These payments include any other loans or credit cards.

4. Are property taxes part of a mortgage?

The UAE does not impose property taxes on residential real estate per se. This aims to promote investments in this sector. Nevertheless, other fees might apply, such as registration and maintenance fees, as well as service charges.

5. Is buying property in Dubai a good investment?

Real estate investment in Dubai is a very lucrative endeavor both at the level of ROI and investment value. The stable track record of the sector, the promising rental rates, the booming economy, the safety and stability of the city, and the variety of property choices are some of the reasons why investing in Dubai real estate is a wise decision.

6. How can I invest in real estate in Dubai?

Dubai’s real estate sector is one of the richest in the world in terms of options. You can invest in a ready-to-move or off-plan apartment, villa, or even penthouse. Then you would have the option of reselling with a markup or renting for a steady income.

7. Can foreigners buy property in Dubai?

Yes, foreigners and expats are allowed to buy and own property in Dubai, in areas designated as freehold. After meeting the criteria related to visa, employment, and income; they can seek financing from a national or a private bank.

Know more.

8. Can I have two home loans at once?

Yes, it is possible to have two or even multiple home loans in the UAE. Receiving approval for these multiple mortgages will surely depend on factors such as credit record, income and other existing liabilities and debts.