UAE fixes expat home loans at 75pc of value
Dubai, October 29, 2013
The UAE Central Bank today issued new property mortgage lending rules for various categories of buyers.
For UAE nationals seeking a loan for the first property, the loan eligibility will be a maximum of 80 per cent for properties valued at Dh5 million ($1.36 million) and below and 70 per cent for properties valued above Dh5 million, the Gulf News report said.
If UAE nationals seek loans for a second property, the loan will be limited at 65 per cent of the value of the property.
For expatriates, the mortgage limit for the first property has been fixed at 75 per cent of the value if the total cost is less than Dh5 million and 65 per cent if it costs more than Dh5 million. For a second property, expatriates will be eligible for a loan of 60 per cent of the value of the property.
The maximum mortgage on property being bought offplan has been set at 50 per cent, regardless of the category. The maximum loan term is set at 25 years and the maximum age for the borrower at the time of the last installment is set at 70 years for UAE nationals and 65 years for expatriates, the report said.
The central bank also said the total monthly installments of all debt should not exceed 50 per cent of the monthly income of the person seeking loans. The maximum financing allowed for UAE nationals will be eight times of their annual income and for expatriates it will be seven times of their annual income.
Commenting on the new rules, Ziad El Chaar, Managing Director, DAMAC Properties, said: “This new system does not include any guidelines for banks to provide a pragmatic and practical non-resident mortgage, which we believe is required to attract a more international investor base.
“While we welcome all efforts by the UAE Central Bank to increase regulation and offer further security in the Dubai property market, we believe there is also a requirement to provide overseas clients the opportunity to purchase a home in the UAE and we call on all banks to implement such a facility with easy, straightforward application requirements.”