Rents are on the rise in the UAE and many expats are now considering buying a property to avoid rental hikes and the threat of moving every year.

But with over 30 mortgage lenders and 50 different mortgage products to choose from in the UAE, finding the right mortgage to suit your needs can be a minefield. So here’s our 10-point guide to finding the right mortgage for you:

1. Secure a mortgage before you put in an offer

If you have decided to buy a property in the UAE, the first thing you should do before you look is to get the mortgage in place. Once you have approval, you will know exactly how much you can borrow and, therefore, what properties you can look at.

While interest rates have dropped from the dark days of the downturn when they hit 9%, they are still relatively high when you consider that interbank borrowing costs have dipped very low.

2. Compare, compare, compare

When taking on any personal finance, it is essential to shop around for the best deal. At, users can compare mortgage rates, loan-to-value ratios, early settlement and upfront fees as well as the maximum loan amounts.

For any home loan, ask yourself what you want from your mortgage. Do you want a fixed or variable rate, how long do you want your repayment term to be and do you want the flexibility to move between lenders? Also, if you are fully aware of the different types of home loan out there, you could use your market knowledge to negotiate a better rate. Mortgage lenders may offer a lower fee or higher loan-to-value if they feel it will entice you to sign up with them.

3. Don’t forget the fees

When deciding how much you can afford, don’t forget to calculate the costs associated with setting up a mortgage. In fact fees alone can account for up to 5% of the total purchase price. They include an arrangement fee – typically 1 per cent of the mortgage – a valuation fee for valuing the property, and an upfront processing fee – again typically 1%. There is also compulsory life and home insurance to consider and the Land Department’s fees such as a mortgage registration fee. If you have used a mortgage broker there will be fees for that service too as well as conveyance fees to cover the legal aspects of the deal.

4. Watch out for hidden fees

When choosing a mortgage, don’t just go for the lowest rate as that might come with a big early settlement fee of up to 5%.  Beware of the transfer fees, which are charged when you switch to another lender and can also be as much as 5%. Consumers can end up being locked into deals because transferring to another mortgage lender is too expensive.

5. Getting approved

Getting approval depends on various factors such as how long you have been here, your income level, what other debts you have and whether or not you have a family and can show you are committed to staying here.

Under Central Bank regulations, your monthly mortgage payments plus any other debt repayments you have must not be more than half of your monthly salary: Expats can typically borrow up to 85 per cent of the property and UAE Nationals up to 90 per cent.

The other thing to remember is that unlike other markets around the world, banks don’t always like lending to two people who are not related. So if you want to buy with someone else, make sure you can find a bank that will lend to both or all partners.

Once approval is secured, you generally have 90 days before that deal expires. If you don’t find the home you want in that time, the deal can be refreshed with new documentation but remember, depending on market conditions, it might not be the same as the one you had before.

6. Get your documentation in order

To secure a mortgage approval you generally need:

  • A salary statement from your employer
  • Six months of bank statements if you are not borrowing from your own bank
  • Credit card statement copies plus declaration of any loans such as car loans, personal loans etc
  • Proof of address such as a utility bill
  • Copy of your ID including passport, visa and Emirates ID
  • Finally, if you have a mortgage in another country, the bank may ask to see documentation associated with that too

7. Don’t lie

It is wise to be completely honest about your financial history as banks will now be able to access more information about you. The Al Etihad Credit Bureau was launched this year and banks are now sharing information about their customer’s credit histories. This should help to bring more transparency to the mortgage market and eradicate bad loans.

8. Beware of the mortgage cap

Remember, you could need a sizeable deposit for your mortgage so make sure you have the cash in place and, ideally, get the deal signed before the proposed mortgage cap comes into play. The cap, implemented by the UAE Central Bank, has seen banks forced to demand bigger deposits to secure a mortgage, which vary depending on the price and whether it is your first or subsequent purchase.

9. Beware of the bubble

The big question for anyone taking on a mortgage is whether this is actually the right time to buy. In recent weeks property experts have been debating whether Dubai is actually experiencing another bubble.  You only need to look around the emirate ­– with the emergence of new construction signs and cranes dominating the skyline once more ­– to know that Dubai is leading worldwide property prices this year.

10. Self-employed? Working for a non-listed company?

Your choices will be more limited as a self-employed individual as you do not have a salary to transfer or a regular income but there are still mortgages for the self-employed available. If you work for a non-listed company you are actually deemed less credit-worthy as an individual as it is a factor UAE banks actually factor in when assessing your application.

Be patient

Securing a mortgage can take time; so don’t get stressed if it takes longer than you hoped. To speed up the process, pay off any debts and get all the documentation together as quickly as possible. Happy house hunting!