How can foreign real estate investors get a mortgage in Dubai?

There’s no denying that Dubai’s real estate market has been striking record deals after record deals, and has long had a pull on foreign real estate investors with its attractive prices, tax-free living and world-class amenities.

So, when it comes to investing in a city like Dubai, where simplicity meets luxury at every step and where life just gets easier - from smart homes to smart cars, who wouldn’t want to place their roots down in Dubai?

And once you’re convinced on investing in Dubai’s top ultra-luxurious communities, financing is the next step and you might be wondering how you could get your hands on a mortgage as a foreign real estate investor. Well, until you become an investor - then you’ll get your hands on the Golden Visa!

Anyway, let’s jump into the few steps to understanding the process of accessing finance in Dubai as a foreign real estate investor.

Research and choose a lender:

The first step to investing is always research! We highly suggest foreign real estate investors should conduct a thorough research to identify banks and financial institutions in Dubai that offer mortgage loans to foreign real estate investors. Look for different financing options and companies with experience in working with foreign real estate investors - that also provide favourable terms and conditions tailored to what suits your financial needs.

We suggest taking a look at our mortgage calculator so you can get the best idea for financing your home!

Once you’ve done your research and found a suitable lender, it's time to find the right property that fits within the lender’s financing options and your terms.

Here are the core features foreign real estate investor loans in Dubai:

Tenure: foreign real estate investors seeking a mortgage in Dubai can typically have a maximum tenure of 25 years. However, it's important to note that the lender must be under the age of 65 years (for salaried individuals) or 70 years (for self-employed individuals) by the end of the loan tenure.

Amount: The loan amount offered to foreign real estate investor investors depends on various factors, including the investor's financial condition. While it may vary among different banks, as a rough estimate, some banks can provide mortgages up to AED 20 million.

Interest Rates: The interest rates for foreign real estate investor mortgages can vary from bank to bank. On average, you can expect to pay around 4.5% to 6.5% interest rate. The rate can be either fixed or variable, depending on the specific policy of the bank.

LTV (Loan to Value Ratio): foreign real estate investors are typically required to pay a minimum of 30% of the total property value as a down payment if the property is worth more than AED 5 million. However, some banks may offer financing up to 50% of the property value, depending on their policies.

Types: foreign real estate investors in Dubai can choose between two major types of loans: conventional loans and Islamic financing loans. Conventional loans follow the standard banking practices, while Islamic financing loans adhere to Sharia-compliant principles of finance.

Here are the banks in Dubai providing loans to foreign real estate investors:

Dubai Islamic Bank

HSBC

Abu Dhabi Islamic Bank

First Abu Dhabi Bank

Emirates Islamic Bank

Ajman Bank

Standard Chartered

Abu Dhabi Commercial Bank

Next steps to getting your mortgage in Dubai

Meet eligibility criteria:

So, in case you didn't know, each lender will have specific eligibility criteria that must be met. These typically include providing proof of identity, income, and residency status. Some lenders may also require a minimum down payment, which can range from 20% to 35% of the property value.

Here are the general criterias applicable across all Dubai’s banks and financiers:

Citizenship: Typically, banks and financing companies have a set list of countries that you need to be a citizen of before applying for a foreign real estate investor home loan in Dubai. Banks may have specific criteria regarding the countries they consider eligible - so we suggest reading up on your country’s specific criterias.

Employment Status: You must be a salaried or self-employed individual to apply for a foreign real estate investor mortgage. Banks usually require proof of stable employment or income sources. This could include your employment contract or company licence.

Age Restrictions: Some banks may have age restrictions for foreign real estate investor mortgage applicants. For instance, many banks in Dubai require foreign real estate investor applicants to be above the age of 25 years to apply for a home loan. Although, there are multiple financing companies in Dubai that offer home loans to people above the age of 21.

Minimum Monthly Income Requirement: Banks in Dubai need you to meet the bank's minimum monthly income requirement, which can vary for UAE expats and non-residents. It's important to note that this requirement must be met after tax deductions. For example, ADCB requires foreign real estate investors to have a minimum monthly income of at least AED 25,000 (post-tax) to qualify for their mortgages.

Approved Property Developers and Projects: Some banks maintain a list of property developers and projects that are approved for mortgage financing. It is essential to ensure that the property you intend to purchase falls under this approved list before applying for a mortgage.

Once you have met the financier’s criteria - you then will proceed with your application.

Prepare required documents:

It's important that you gather the necessary documents for the mortgage application process. These typically include passport copies and visa documents, proof of income (such as salary slips, employment contracts, or business income statements), bank statements from the past six months, and property documents, such as sales and purchase agreements or reservation agreements.

Property valuation:

Once you’ve filled your application and the application is underway, the lender will conduct a valuation of the property you intend to purchase. This assessment helps determine the loan amount the lender is willing to provide based on the property's total value.

Loan application submission:

After the assessment is complete and the loan amount is confirmed, you will file your completed mortgage application along with the required documents and give it to the lender.

But we suggest you stay prepared to provide any additional information or clarification requested by the lender during the application process.

Mortgage approval and terms negotiation:

If your loan application is approved, the lender will then provide a formal offer letter outlining the terms and conditions of the mortgage. Take the time to review the terms carefully and negotiate if necessary. Pay attention to crucial factors such as the interest rate, loan tenure, fees, and any other conditions relevant to your investment. Then it's in your hands to accept the offer and move forward.

We suggest studying up on a guide to mortgages in Dubai so that you’re better equipped with the crucial factors.

Property transfer and mortgage registration:

Once you have accepted the offer and agreed to the terms, the process of transferring the property into your name will begin. This involves paying the necessary fees, including the Dubai Land Department transfer fee, registration fee, and mortgage registration fee. The lender will also register the mortgage against the property.

Mortgage disbursement:

After completing the property transfer and registration process, the lender will then disburse the mortgage funds. These funds are typically paid directly to the seller or developer of the property. And once that’s done - your payment plan will start.

Repayment and ongoing obligations:

Once the amount is paid by your financier to the developer or seller, your payment plan will begin. As a foreign real estate investor with a mortgage in Dubai, it's important to make timely repayments according to the agreed schedule.

We suggest that you familiarise yourself with all ongoing obligations to owning the property such as insurance requirements, maintenance fees, and any other responsibilities associated with owning the property.

If you have any doubts or queries regarding your mortgage, or would like to know more on how you can get a mortgage in Dubai - Get in touch with our Head of Mortgages; Stuart Roe.

And if you are looking to understand the market better, don’t miss out on our Taking Care of Business podcast on Mortgages with COO; Carl Allsopp and Head of Mortgage Services; Stuart Roe, which spans over the mortgage rates, and some commonly asked questions for first-time buyers.