Buyer Guides · 4 min read
Mortgage rates in Dubai explained
The EQT Private Office · RERA-registered brokerage · Published August 3, 2026 · Updated September 24, 2026
Dubai mortgage rates are built on EIBOR, the Emirates Interbank Offered Rate, plus a bank margin, and come in fixed and variable forms. Lenders offer non-residents roughly 50-60% loan-to-value and residents up to 80%. Your rate depends on the EIBOR benchmark, the bank's margin, your profile and whether you fix or float. Below: how banks set rates, fixed versus variable, the costs on top of interest and how to pick the right structure for your purchase.
Key takeaways
- •Dubai mortgage rates are based on EIBOR plus a bank margin.
- •Residents can borrow up to 80% LTV; non-residents around 50-60%.
- •Fixed rates give payment certainty for an initial period; variable rates move with EIBOR.
- •Budget for the 4% DLD transfer fee, valuation, arrangement and mortgage registration fees.
- •There is no tax on rental income, property or capital gains to offset against interest.
- •Get pre-approval before you offer to confirm your true budget.
How Dubai mortgage rates are set
Almost all Dubai mortgage pricing traces back to EIBOR, the benchmark rate at which UAE banks lend to each other. Your lender adds a margin on top, so when EIBOR rises or falls, variable rates follow. EIBOR itself broadly tracks US interest rates: the dirham is pegged to the US dollar, and the UAE central bank mirrors US monetary policy to hold that peg.
Your own rate also reflects your profile: income stability, resident or non-resident status, the property type and the loan-to-value you request. A lower LTV and a strong, well-documented income win a keener margin, because the bank carries less risk. Self-employed applicants and off-plan buyers may face slightly higher margins or tighter terms.
Fixed versus variable mortgages
Dubai lenders offer both, and your choice comes down to how much you value certainty against flexibility. A fixed rate holds for an initial period, commonly one to five years, then reverts to variable. A variable rate tracks EIBOR plus a margin from day one, so your payment can change each time the benchmark resets.
- •Fixed: predictable payments during the fixed term, easier budgeting, protection if rates rise.
- •Fixed drawbacks: a higher starting rate in most cases, plus early-settlement conditions.
- •Variable: often a lower initial rate and more flexibility, and you benefit if rates fall.
- •Variable drawbacks: payments rise if EIBOR climbs, and budgeting is less certain.
- •Many buyers fix for the early years, then review at reversion.
How much you can borrow
The regulator and each bank's policy set the loan-to-value caps. Residents can borrow up to 80% LTV on a first property within value limits, so the deposit starts at around 20%. Non-residents can access around 50-60% LTV, which means a deposit of roughly 40-50%, and should expect a shorter maximum term and slightly higher margins than a resident.
Lenders also cap your total monthly repayments across all debts as a share of income, commonly around half. Age matters too, as banks structure terms to end by a set age, often in the late sixties. Confirm your borrowing capacity before you start viewing, so you shop within a realistic budget.
The costs beyond the interest rate
The headline rate is one line in a longer list. You pay these purchase and financing costs upfront, and in most cases you cannot add them to the loan, so build them into your budget from the start.
- •4% Dubai Land Department transfer fee on the purchase price.
- •Mortgage registration fee, charged as a small percentage of the loan amount.
- •Bank arrangement or processing fee, around 1% of the loan.
- •Property valuation fee required by the lender.
- •Roughly 2% agency commission plus 5% VAT, and mandatory property and life insurance.
The application process step by step
Financing starts with pre-approval. The bank reviews your income, existing debts and profile and issues a letter confirming how much it will lend, valid for around sixty days in most cases. With that letter you negotiate from strength and can move quickly once you find the right property.
After you agree a purchase, the lender commissions an independent valuation to confirm the property is worth the price, then issues a formal offer letter with the rate, term and conditions. You and the seller sign a memorandum of understanding and settle the fees. The transfer completes at the Dubai Land Department or a registration trustee office, where the mortgage is registered against the title. Have your documents ready from the outset and the timeline stays tight.
- •Secure pre-approval to confirm your budget; it lasts around sixty days.
- •Agree the purchase and sign a memorandum of understanding with the seller.
- •The bank commissions an independent valuation of the property.
- •The lender issues a formal offer letter with the rate, term and conditions.
- •Settle fees and complete the transfer and mortgage registration at the DLD.
Choosing the right structure
Fix if you value certainty and want protection against rising rates, especially when you are buying near the top of your affordability and a payment rise would hurt. Go variable if you expect rates to fall or want the freedom to settle early. In both cases, read the early-settlement and portability terms, since a heavy early-repayment fee can stop you refinancing to a better deal.
Get pre-approval before you make offers. It confirms your real budget, strengthens your negotiating position and speeds up completion. And because Dubai levies no tax on rental income, capital gains or property, you have no tax bill to offset mortgage interest against, which makes a competitive rate all the more valuable to your net return.
Frequently asked
What are current mortgage rates in Dubai?+
Banks price Dubai mortgages as EIBOR plus a margin, so rates move with the benchmark, which broadly follows US rates because of the dirham's dollar peg. Both fixed and variable products are available. Your exact rate depends on EIBOR at the time, the lender's margin, your income profile and your loan-to-value.
What is EIBOR and why does it matter?+
EIBOR is the Emirates Interbank Offered Rate, the benchmark at which UAE banks lend to one another. Dubai mortgage rates are set as EIBOR plus a margin, so variable payments rise and fall with it. Because the dirham is pegged to the US dollar, EIBOR broadly tracks US interest rate movements.
How much can a non-resident borrow in Dubai?+
Non-residents can borrow around 50-60% loan-to-value, which means a deposit of roughly 40-50% of the purchase price. Residents may borrow up to 80% LTV on a first property within value limits. Lenders also apply affordability, debt-burden and maximum-age-at-maturity rules, so get pre-approval before you start viewing.
Should I choose a fixed or variable mortgage in Dubai?+
Choose fixed for payment certainty and protection if rates rise, which helps when you buy near your affordability limit. Choose variable for an often lower initial rate and flexibility if you expect rates to fall or plan to settle early. Many buyers fix for the first few years, then review when the rate reverts to variable.
Can I deduct mortgage interest from tax in Dubai?+
No. Dubai charges no tax on rental income, no capital gains tax and no annual property tax, so there is no income tax to deduct mortgage interest against, unlike in the UK or US. The upside: you receive your rental income tax-free.
How long does it take to get a mortgage in Dubai?+
A few weeks from pre-approval to completion, provided your documents are ready. Banks can issue pre-approval within days, valid for around sixty days. After you agree a purchase, the bank arranges a valuation and issues a formal offer, and the mortgage is registered at the Dubai Land Department when the transfer completes.
