Refinance and mortgage buyout in the UAE
A refinance, or mortgage buyout, moves an existing home loan to another lender. Equity release and a loan against property raise money against a home you already own. A switch is worth it only when the new cost, including any fee to leave the current bank, is lower than staying put.
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Buyout, equity release, loan against property
A buyout pays off the current mortgage and replaces it. You are not buying the property again. The Dubai Land Department charges 0.25% to register a mortgage and a further 0.25% when a mortgage is transferred, under Executive Council Resolution No. 30 of 2013. Discharging a mortgage is a separate fee on that schedule.
Equity release and a loan against property use the equity in a home you already own. The Central Bank loan-to-value ceilings still apply, including the lower cap once the home is not your first owner-occupied property. The new lender will want its own valuation.
Searches for a loan buyout in the UAE also pull in personal loans and car loans. This page is only about finance secured on a property.
When a switch is worth doing
Add the early settlement charge in your current contract to the new lender's arrangement fee, the valuation, and the Land Department fees. Then compare that total with the repayments you would make if you stayed.
The Central Bank requires the fees to be disclosed. It does not, in the mortgage regulations, set one early-settlement percentage for every bank. Use the figure in your offer, not a number from a forum.
Questions
A buyout is a new lender paying off your current home loan and putting its own loan in place. It is a refinance of a property mortgage, not a personal-loan or car-loan buyout.
Executive Council Resolution No. 30 of 2013 sets the fee for transferring a mortgage at 0.25% of the mortgage value, and the fee for registering a mortgage at 0.25% of the debt. Discharging a mortgage is a separate item on the same schedule.
Yes, if a lender will advance against the property and the loan stays inside the Central Bank loan-to-value ceiling for that kind of home. The bank values the property. If the value is lower than you expect, the amount you can draw is lower.
No single percentage is printed in the Central Bank mortgage regulations as a universal charge. The cost of leaving is in your current offer. Put that number next to the new rate before you switch.