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

By Sakshi Srivastava - 12 Jan 2022 Last Updated: 30 Jun 2022
Non-Resident Home Loan Interest Rates, Cost and Duration in UAE

The real estate sector is has been on the verge of a severe decline over the years. However, the post-COVID scenario has further turned tables, leading to a stabilization in the sector. In our study, we will further discuss the home loan interest rates, cost, and duration for the non-residents in Dubai.

Growth of the Real Estate Sector of the Country

The UAE real estate market is showing indications of improvement. During the worldwide economic slowdown of 2009, the UAE real estate industry was one of the hardest hits. Prior to the pandemic, the industry had grown, and analysts predicted that the real estate sector would stabilize in time for Expo 2020. The introduction of the pandemic, on the other hand, has hampered the sector's recovery, with enforced lockdowns and mobility restrictions putting further strain on the industry. The sector is now exhibiting indications of recovery as the world slowly opens up.

The UAE government has taken a number of steps to boost the economy in the last year, including visas for retirees and remote workers, as well as the expansion of the 10-year golden visa project. In order to attract international capital, the UAE government amended its commercial companies’ law and removed the need that onshore enterprises to have an Emirati shareholder.  Pent-up demand and government-sponsored stimulus measures have increased economic activity in Abu Dhabi and Dubai, where property markets have risen sharply.

Why to Invest in the UAE?

Non-residents wishing to buy or invest in real estate in the United Arab Emirates can get a mortgage quickly. Given that the value of Dubai property is expected to rise steadily between 2023 and 2024, now is the best time to invest. The United Arab Emirates is becoming a more attractive expat destination, particularly in business-friendly areas like Dubai and Abu Dhabi. Despite the fact that the UAE has millions of expats, many still choose to rent due to the high cost of buying, uncertainty about how long they will be living overseas, or the costs associated with a property purchase.

In the UAE, foreign purchasers can buy apartments and houses in certain regions with freehold developments.  Many expats buy new homes off the plan, from a developer. This usually entails paying a 10% deposit upfront and then making further payments at predetermined intervals while the property is being built. Also, in Dubai, the government has established a new Real Estate Planning Committee. This committee's mission is to put in place strategies to improve the supply-demand balance for the housing units. The group will develop a comprehensive strategic plan for all major real estate projects in Dubai over the next ten years. As a result of these plans, the demand for housing units in the country is likely to increase. This, in turn, will help to facilitate the introduction of flexible credit policies, which will help to stimulate the sales of new housing units.

Furthermore, due to low loan rates and low expenses, local and international investors have been eyeing Dubai's extensive real estate market. If foreign investors wish to buy property without straining their finances, they can get mortgage loans for non-UAE citizens.

Key Questions in the Mind of Investors

  • What are the Non-Resident Home Loan Interest Rates in the United Arab Emirates?
  • What is the Non-Resident Home Loan Cost in the United Arab Emirates?
  • What is the Non-Resident Home Loan Duration in the United Arab Emirates?

What are the Non-Resident Home Loan Interest Rates in the United Arab Emirates?

The interest rate on a loan to purchase a home in Dubai typically varies from 3% to 5%. Typically, interest rates fluctuate and may continue to fall in the coming years. Individuals who want to take out a loan can choose a fixed rate. This is typically for a period of 24 months. After that, a new rate is imposed.

If you pay a little deposit upfront, the updated rate may be significantly higher. Users can also request a 60-month fixed-rate offer. However, it would often be roughly 6% higher. As a result, you could be able to acquire one of the lowest house loan interest rates in the UAE. Examining a mortgage rate that is usually variable in nature is one of the most realistic solutions accessible for acquiring the greatest house loan in Dubai. It can, however, create confusion when determining whether you'll be able to afford the payments if the rate fluctuates in the future.

What is the Non-Resident Home Loan Cost in the United Arab Emirates?

To obtain a property loan, expats must make specific payments. These regulations are enforced by the UAE Central Bank.

Here's what you'll need to put money aside for:

  • 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)

A registration fee of 0.25 percent of the loan total is required when taking out a mortgage in the UAE.

You may also be charged a valuation fee and be required to pay for mortgage protection insurance by your lender.

What is the Non-Resident Home Loan Duration in the United Arab Emirates?

The maximum loan term in the UAE is twenty-five years, with a maximum age limit of 65 for salaried individuals and 70 for self-employed individuals. Of course, a longer-term loan decreases your monthly payment but increases your overall interest amount. Your borrowing capacity grows as well with a longer-term mortgage in Dubai. You can also take out a longer-term loan and make additional payments each year to shorten the time it takes to repay it. Without incurring any penalties, you can return an additional 10% of the principal amount each year.

Conclusion

Investing in property in the UAE at this time is the right time for non-residents as the sector is anticipated to boom in the coming years. Connect with Dhanguard for Non-Resident home loans. Our sales department will walk you through the process from the start to its end and will also help you to choose the right bank for you. If you are looking for any services related to avail loans, connect with us, we will gladly assist you.

By Sakshi Srivastava

12-Jan, 2022

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