Financing a purchase in Dubai: mortgages for non-residents

It is possible to finance a purchase in Dubai with a bank loan, including for a non-resident, under stricter conditions than for a resident.

Loan-to-value ratio

Banks lend a share of the property's value, with the rest provided by the buyer. For non-residents, the financed share is generally lower than for residents: around half the property's value at the time of writing, versus more for a resident. Central bank rules and each institution's own policy make these figures vary.

Documents required

Passport and proof of residence.
Proof of income: tax returns, payslips or financial statements.
Recent bank statements.
Credit history from the country of residence.
Documents relating to the property: sale contract, valuation.

The cost of a mortgage

Processing fees, property valuation, registration of the mortgage with the Dubai Land Department (calculated on the amount borrowed), life and disability insurance, and home insurance. On top of this come interest payments, at a fixed rate for an initial period then variable, based on a reference rate.

Financing an off-plan property

This is possible under certain conditions, often after a significant share of the price has been paid. Banks assess the project and the developer, and some projects are eligible more easily than others.

Accounting for currency risk

A loan in dirhams brings the debt closer to the currency of the property, whose exchange rate is pegged to the US dollar. An investor who earns income in euros needs to assess the effect of exchange rate movements on their monthly payments.

A few tips

Request several offers and compare the total cost, not just the rate.
Check early repayment penalties.
Build in a margin: monthly payments should remain manageable even if rents fall or the property sits vacant.
Have the financing plan validated by an independent advisor.

To review your project and check the conditions currently in force, book an appointment with Arzouni Properties.