The National published an article on different factors to consider when taking a mortgage in UAE, outlined by Souqalmal.com.
There are two kinds of rates offered by banks on mortgages, fixed and variable. The fixed rate on your mortgage is set for a certain number of years while a variable rate changes with the market rate.
The rate calculation on financing can also be calculated in two ways. While the reducing balance method charges you a rate based on your outstanding balance, the second method, the flat rate, charges you a rate based on your principal amount for the duration of the term.
Almost six in 10 of all home loans in the UAE are offered at reducing rates ranging from 3 per cent to 4 per cent. Only about 10 per cent of mortgages are offered at rates lower than that, with the lowest rates starting from 2.94-2.95 per cent, based on a reducing balance.
For the full article go to The National