Non-Resident Home Loan Interest Rates, Cost and Duration in Dubai

By Sakshi Srivastava - 28 Dec 2021 Last Updated: 30 Jun 2022
Non-Resident Home Loan Interest Rates, Cost and Duration in Dubai

According to statistics provided by the Dubai Land Department (DLD) last week, the real estate market in Dubai has recovered from Covid-induced uncertainty and is displaying strong signals of sustainable development. According to DLD, October was Dubai's best in the last eight years, with the real estate sector attracting a total of Dh.13.12 billion in investments split across 5,352 transactions. This further shows the positive environment across the real estate sector of the city as well which further portrays that investment at this moment is anticipated to be fruitful by both residents as well as non-residents.

In our study, we will further discuss the home loan interest rates, cost, and duration for the non-residents in Dubai. These are also considered as the most important questions in the mind of a borrower.

Why Invest in Property in Dubai?

The fact that Dubai presently has a favorable climate for property investment is backed up by renowned real estate developers who are developing new developments. Dubai, surprisingly, expects 64,000 additional housing units to be built in the near future as a result of the current boom and constant rise in agreements. That explains why, despite plentiful supplies, housing in Dubai will stay affordable, also there is no doubt that Dubai's real estate sector has recovered, and based on current market trends, we can be pretty confident that it will continue to rise for at least the next three years. Given that the value of Dubai property will continuously increase by 2023-24, now is the greatest time to invest.

In addition, in 2019, Dubai created a new permanent residency "golden card" plan, which is available to investors and excellent professionals in a variety of fields. In order to address the present demand-supply imbalance in the country, the Dubai government announced the formation of a new Real Estate Planning Committee. The goal of this committee is to implement initiatives to improve the supply-demand balance. For the next ten years, the committee will produce a comprehensive strategic strategy for all significant real estate projects in Dubai. The demand for housing units in the country is expected to rise as a result of these plans. This in turn will also play a favorable role in the implementation of flexible loan policies in order to boost the sales of new housing units as well.

Moreover, local and international investors have been eyeing Dubai's broad real estate sector due to cheap loan rates and affordable costs. Overseas investors can obtain mortgage loans for non-UAE residents if they want to purchase property without putting their finances under strain.

What is the Non-Resident Home Loan Interest Rate?

The interest rate on a home loan in Dubai can range from 2.99 to 5%. The rates are now trending downwards and are projected to continue to do so in the future. Things can, however, alter. If you choose a fixed-rate mortgage, it will normally be for two years. Following that, a revision rate will be applied. The revision rate may be higher if you paid a lower upfront payment. You may also qualify for a five-year fixed-rate deal. However, that percentage would be on the higher end of the scale, usually around 5%. Variable interest rate mortgages are another choice for home loans. But keep in mind that estimating the entire amount you'll have to pay in the long term is difficult. Also, it's nearly impossible to budget accurately. Variable interest rates, on the other hand, will save you money if you have a good grasp of the market and believe that interest rates will fall in the future. However, the worst-case scenario should also be considered.

Moreover, on the other hand, you can expect a marginally higher interest rate than that for emigrant residents as well.

What is the Duration of Non-Resident Home Loans in Dubai?

In the UAE, the maximum loan term is twenty-five years, with a maximum age limit of 65 years for salaried persons and 70 years for self-employed people. A longer-term loan, of course, lowers your monthly payment but raises the total interest amount. With a longer-term mortgage in Dubai, your borrowing capacity increases as well. You can also take out a longer-term loan and pay extra each year to reduce the number of years it takes to repay it. You can return an additional 10% of the principal amount each year without incurring any penalties.

What are the Costs associated with Non-Resident Home Loans in Dubai?

To obtain a property loan in Dubai, non-residents must make specific payments. These regulations are enforced by the UAE Central Bank.

Given below is the upfront cost associated with Non-Resident Home Loan in Dubai:

  • A down payment of 25% of the buying price is required (properties less than AED 5M)
  • Transfer fees are 4%.
  • The registration charge for a mortgage is 25%.
  • The valuation price varies between AED 2,500 and AED 3,000.
  • 2% commission on real estate transactions (can vary)

What are the Criteria to Apply for a Non-Resident Home Loan in Dubai?

The criteria are given as follows:

  • Before applying for a non-resident home loan in the UAE, you must be a citizen of one of the countries on the bank's list.
  • To apply for a non-resident loan, you must be a salaried or self-employed individual.
  • Some banks in the UAE have age restrictions for non-resident loan applicants.
  • To apply for a home loan in the UAE, for example, a few banks require non-resident applicants to be over the age of 25.
  • You must also meet the bank's monthly minimum income criterion.
  • Non-residents and UAE emigrants may have different experiences.
  • Furthermore, for after-tax deductions, the minimum income level must be satisfied. For instance, a few banks demand non-residents to have a monthly income of at least AED 25,000 after taxes to be eligible for loans.

Conclusion

Are you a Non-Resident looking forward to own a property in Dubai. Connect with Dhanguard, our team of experts will guide you in choosing the right bank and right property for you. Connect with us, we will gladly assist you.

By Sakshi Srivastava

28-Dec, 2021

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