In Dubai, the Mortgage Cap plays a central role in regulating the property market. The regulation was introduced to ensure a sustainable and stable property market and to limit the risks for both lenders and buyers.
The current mortgage cap provisions provide for the following limits:
- For Primary properties up to AED 5 million:
- UAE nationals: up to 80% financing
- Foreign buyers: up to 75% financing
- For Properties over AED 5 millionmaximum 70% Financing
- For Secondary and investment propertiesmaximum 65% Financing
These regulations have Practical effects on your purchase decision: For example, if you are a foreign buyer Dubai property for AED 2 million, you must raise at least AED 500,000 (25%) as equity. The maximum loan amount in this case would be AED 1.5 million.
The Mortgage Cap offers several advantages:
- Protection against over-indebtedness of buyers
- Stabilisation of property prices
- Reducing the risk of property bubbles
- Increasing market stability
For you as a prospective property buyer, it is important to know that these regulations binding and must be complied with by all banks licensed in the UAE. When planning your property investment, you should therefore consider the required equity at an early stage and structure your financing accordingly.
In addition to the mortgage cap, you must factor in other costs, such as
- Dubai Land Department Fees (4%)
- Brokerage fees (typically 2%)
- Processing fees of the bank
- Valuation costs
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