Are Dubai Mortgages Interest-Free? UAE Mortgage Guide

Are mortgages in Dubai interest free?

No, not conventional ones. A conventional mortgage from a UAE bank charges interest, usually a fixed rate for the first one to five years and then a margin over EIBOR. Interest-free home finance is available from Islamic banks and the Islamic arms of conventional banks. It replaces interest with a profit rate or rent, usually also linked to EIBOR, so the monthly cost is often close to a conventional mortgage.

The two main Islamic structures work differently:

• Ijara (lease to own): the bank buys the property and leases it to you. Each payment covers rent plus part of the price, and ownership passes to you at the end of the term.
• Murabaha (cost plus profit): the bank buys the property and sells it to you at a higher price agreed upfront, paid in instalments.

The Central Bank’s mortgage regulations apply to Islamic home finance as well, so the same loan-to-value, debt burden and term limits below apply whichever structure you choose. See how Islamic mortgages are structured.

Who can get a UAE mortgage, and how much can they borrow?

UAE nationals, expatriates living in the UAE and non-residents can all get a UAE mortgage. The Central Bank sets the maximum loan-to-value by buyer and property (CBUAE Rulebook, Regulations Regarding Mortgage Loans, Article 3, checked October 2026):

• UAE nationals, first home: up to 85% for a property worth AED 5 million or less; 75% above that.
• Expatriates living in the UAE, first home: up to 80% for a property worth AED 5 million or less; 70% above that.
• Second home or investment property: up to 65% for UAE nationals and 60% for expatriates, whatever the value.
• Off-plan property: up to 50% for every buyer.
• Non-residents: each bank sets its own limit. Enness Global typically sees 60% to 70%.

Income caps the loan as well. Total debt repayments may not exceed 50% of income, and the bank must test affordability at 2 to 4 percentage points above the rate on offer. The loan may not exceed seven times annual income for expatriates or eight times for UAE nationals, and the maximum term is 25 years. Banks can lend less than these limits, and most set an age limit at the end of the term.

A full income and affordability assessment is the norm. A few lenders offer low-document mortgages, assessed differently and capped at a lower loan-to-value (typically 60%), for borrowers with limited paperwork. Terms depend on status, valuation and lender criteria.

What are UAE mortgage rates in 2026?

Most UAE mortgages start on a fixed rate for one to five years and then move to a margin over EIBOR. Three-month EIBOR was 4.19% on 12 October 2026 (Dubai Islamic Bank published benchmark rates). The rate you are offered depends on the bank, the loan-to-value, the loan size and your profile. Salaried UAE residents usually get the lowest rates. self-employed borrowers and non-residents usually pay more.

Can you get an interest-only mortgage in the UAE?

Only on an investment property, and only for a limited time. Central Bank rules allow deferred capital repayment on investment loans for up to five years from the first drawdown. A home you live in must be on capital and interest from the start, so each payment repays part of the loan as well as the interest. This differs from the UK, where interest-only UK mortgages are more widely available. See UAE interest-only mortgages.

Are there buy-to-let mortgages in the UAE?

Not as a separate product, as there are in the UK. A UAE investment property is financed with a standard mortgage at the lower investment loan-to-value: 60% for expatriates and 65% for UAE nationals. When the bank assesses affordability, it deducts at least two months’ rent to allow for empty periods. The lender does not set the rent or the type of tenancy the way a UK buy-to-let lender does. See UAE buy-to-let mortgages.

What does it cost to buy a property in Dubai with a mortgage?

Expect to pay these on top of the deposit:

• Dubai Land Department transfer fee: 4% of the purchase price.
• Mortgage registration fee: 0.25% of the loan, paid to the Dubai Land Department.
• Valuation and bank arrangement fees: set by each bank; some banks waive the arrangement fee.
• Early repayment: if you repay or move the loan early, the Central Bank caps the fee at 1% of the outstanding balance or AED 10,000, whichever is lower. A bank may also recover its actual cost of breaking a fixed rate.

Other emirates charge their own registration fees through their own land departments.

Is bridging finance available in the UAE?

Yes, but on a limited basis. Few UAE banks offer bridging loans on residential property. Enness Global has access to a 12-month, interest-only refinance facility on residential property for high net worth borrowers, which is the closest UAE equivalent to a bridging loan. See UAE residential bridging loans.

How do Dubai and Abu Dhabi mortgages differ?

The lending rules are the same, because the Central Bank’s limits apply in every emirate. The differences are in property registration: each emirate has its own land department, fees and areas where foreign buyers can own freehold property. Dubai has the larger and more established market for foreign buyers, while Abu Dhabi’s market is still growing. For Dubai specifically, see Dubai mortgages.

Can you buy UAE property without a UAE mortgage?

Yes. Many Enness Global clients raise the money against assets they already hold rather than borrowing in the UAE. The most common route is refinancing UK property: see UK mortgages for UAE residents, or read the case study of a foreign national living in the UAE who refinanced a UK buy-to-let portfolio. Finance can also be raised against cryptocurrency holdings, commercial property and single-stock positions. Terms depend on status, valuation and lender criteria.

The first conversation with an Enness Global adviser covers which UAE lenders fit your residency, income and property, and whether a UAE mortgage or finance against assets elsewhere is the better route. Call +44 (0)203 758 9393, email info@enness.co.uk or contact us.