HAYAH

19 Sept 2023

  • Insurance & Protection
  • Consumer Advice

Mortgage Approval in the UAE: A Step-by-Step Guide to Buying Your Dream Home

4 mins. read

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Thinking of Buying a Home in the UAE? Start Here

Whether you're a UAE national or an expat, applying for a mortgage in the UAE can seem complex. But with the right guidance, you can make confident decisions that support your property goals.
This simple guide outlines the key steps to get your UAE mortgage approved. From understanding eligibility to choosing the right lender and insurance.

Step 1: Assess Your Mortgage Eligibility in the UAE

Before applying for a home loan, it’s important to determine if you meet the criteria set by UAE banks and financial institutions.

Basic Eligibility Requirements

  • Minimum age: You must be at least 21 years old to apply.

  • Stable income and employment: Proof of steady employment (typically 6+ months with the same employer).

  • Good credit history: A solid credit score and payment history improve your chances of approval and favorable interest rates.

  • Minimum income threshold: Some lenders have income cutoffs (e.g., AED 10,000/month), depending on the loan amount and residency.

Step 2: Choose the Right Mortgage Lender in the UAE

The UAE mortgage market includes a variety of lenders—local banks, international banks, and Islamic financial institutions. Choosing the right one is crucial for securing the best terms.

Factors to Consider When Selecting a Lender

  • Competitive interest rates: Compare fixed vs. variable rates and their respective conditions.

  • Lender reputation: Look into customer reviews and industry ratings.

  • Repayment flexibility:

    • Early settlement options

    • Adjustable loan tenure (up to 25 years)

    • Grace periods or payment holidays

Step 3: Understand Types of Mortgages in the UAE

Choosing the right home loan type depends on your financial goals and preferences.

Types of UAE Mortgages

  • Conventional Mortgage: Traditional loan with interest payments over time.Islamic Mortgage: Sharia-compliant options like Murabaha or Ijarah, where no interest is charged, but a profit margin is applied.

Step 4: Calculate Down Payment & Loan-to-Value Ratio

The loan-to-value (LTV) ratio is a critical factor in your mortgage approval. It indicates the percentage of the property’s price that a bank will finance.

Down Payment Guidelines (Based on Nationality and Property Value)

For UAE Nationals:

  • Minimum 20% down payment for properties valued at AED 5 million or less

  • Minimum 30% down payment for properties valued above AED 5 million

For Expatriates:

  • Minimum 25% down payment for properties valued at AED 5 million or less

  • Minimum 35% down payment for properties valued above AED 5 million

 Step 5: Budget for Additional Mortgage Costs and Fees

Apart from the loan itself, several additional fees apply during the mortgage process in the UAE.

Common Mortgage-Related Fees

  • Processing fee: 0.25%–1% of the loan amount

  • Property valuation fee: AED 2,500–AED 5,000 (varies by lender)

  • Mortgage registration fee: 0.25% of the loan amount, payable to the Dubai Land Department or relevant authority.

  • Broker fees (if applicable): Usually between 1%–2% of the property value

Step 6: Secure Mortgage Protection Insurance

Mortgage protection insurance is mandatory in the UAE and provides financial coverage for loan repayments in the event of:

  • Death

  • Total permanent disability

  • Terminal illness

  • Job loss (optional in some policies)

Why Choose HAYAH’s Loan Protect Policy?

HAYAH’s Loan Protect is one of the most flexible and comprehensive mortgage protection policies in the UAE. 

It offers:

  • Coverage for 1 to 35 years

  • Premium options in AED or USD

  • Monthly, annual, or single-payment plans

  • Coverage up to USD 50 million

  • Fixed premiums throughout the policy term

  • Free temporary life cover during application processing

  • Value-added services like Priority Health Screening

Final Tips for First-Time Home Buyers in the UAE

  • Compare mortgage offers from multiple banks

  • Consider pre-approval to strengthen your bargaining position with sellers

  • Work with a mortgage broker for easier comparisons and negotiation

  • Keep your debt-to-income ratio low to boost approval chances

  • Understand early settlement penalties in case you want to repay the loan ahead of time

Open the Door to Your Dream Property in the UAE

Buying a home in the UAE is an exciting milestone, and with proper planning, it’s entirely achievable.
 By understanding eligibility criteria, down payment requirements, lender options, mortgage types, associated costs, and insurance requirements, you can confidently secure the best mortgage in the UAE for your needs.
Plan ahead, compare wisely, and protect your future with the right insurance, like HAYAH’s Loan Protect, so that your investment stays secure under all circumstances.

Description

Learn how to get a mortgage in the UAE—eligibility, down payments, lenders, costs, and insurance tips to buy your dream home with confidence and protection.

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