Navigating the UAE Mortgage Market - A Guide for Residents & Non Residents

Understanding the UAE mortgage market is key to making informed financial decisions. Whether you're looking to invest in UAE real estate or purchase a second home, you can do so as a resident or a non-resident. At Enness, we help clients navigate the complexities of the international mortgage landscape.

What Are the Typical Lending Terms for UAE Mortgages?

UAE Mortgages are considerably more straightforward than UK mortgages.

One of the key differences between the two markets is that almost all UAE lenders operate on a standard Capital & Interest mortgage over the loan term. This means that your monthly payments include both the repayment of the principal loan amount and the interest. This is one of the main differences when comparing the UAE market to the UK, as interest-only mortgages are more commonly offered in the UK, allowing borrowers only to pay interest for a set period. It is important to note that there are, of course, exceptions. However, there is a general lack of interest-only mortgages in the UAE market.

The simplicity of UAE mortgages is often seen as an advantage, particularly for non-resident investors seeking a straightforward and transparent process and lending terms.

Are There Buy-To-Let Mortgages in the UAE?

Unlike the UK, "Buy to Let' mortgages do not exist. Once the application is approved and the mortgage completed, the property can be used for whatever purpose you wish, whether for personal use or rental. This flexibility is one of the standout features of the UAE mortgage market.

The simplistic nature of the market benefits buyers, as buyers are not restricted and locked into a particular mortgage like in the UK, and the restrictions associated with buy-to-let loans are also eliminated.

This is a significant benefit for property investors as it allows them to purchase a property and change its usage. They are not tied to a mortgage agreement and are free to do with the property as they wish. In the UK, the buy-to-let mortgage market is more restrictive, as the rental income and property use are often tied to specific loan conditions.

What's Possible - Mortgages for Residents and Non-Residents

Both UAE residents and non-residents are eligible to apply for UAE mortgages. However, the terms vary depending on the applicant's residency status.

• UAE Nationals: Loan-to-value (LTV) ratios of up to 85% are typically offered
• Expats Residing in the UAE: The LTV ratio accessed can be up to 80%
• Expats Living Outside the UAE: The lower end of the range, LTVs range from 60-70%

For salaried UAE resident applications, clients can currently expect to pay fixed rates of 4-4.5% for the initial period of their loan. With added complexities such as being self-employed or being a non-resident, this will likely increase to 4.75-5.5%. At Enness, we work with over 500 lenders to ensure we can help secure the best possible rates for your situation.

In most cases, a full income & affordability assessment will be carried out to assess your borrowing capability. However, there are a few lenders who can assist with 'Low Document' mortgages, which are low loan-to-value (typically 60% max) mortgages that are assessed slightly differently and can provide a more streamlined approach for specific borrowers with limited documentation.

Does Bridging Finance Exist in the UAE?

While bridging finance is not as common in the UAE as in other markets, options are still available for high-net-worth individuals (HNWIs) who require short-term financing. There are banks and lending providers who are looking to introduce bridging finance solutions, though they are somewhat limited.

At Enness, we have access to a 12-month, interest-only facility on residential refinances for HNW individuals. This is the closest alternative to a bridging loan available for residential properties in the UAE.

Differences between the Abu Dhabi and Dubai Mortgage Markets

While both Abu Dhabi and Dubai offer relatively similar mortgage products, some key differences exist between the two markets.

Dubai's property market has seen significant growth in recent years, with demand for high-end residential and commercial properties driving the market upward.

On the other hand, Abu Dhabi's real estate market is still growing. It has not yet achieved the same level of explosive growth as Dubai. However, it is expecting to reach similar heights.

As demand increases, it presents opportunities for investors and buyers to purchase real estate in both cities, each offering unique benefits and investment potential.

Other Financing Solutions - Raising Finance Against UK Real Estate, Crypto and More

At Enness, we understand that every client has unique financial circumstances, and sometimes, the traditional mortgage route isn't the best option. We provide several alternative financial solutions that allow clients to purchase UAE real estate.

The most popular solution is to refinance assets from outside the UAE. For example, many of our clients use their UK properties to raise capital for investing in the UAE. This can be an effective way to access funds without liquidating assets or taking on additional debt.

Other potential financing solutions include cryptocurrency holdings, commercial assets and single-line stock. Our team of experts can explore a multitude of avenues to see if we can assist.

Navigating the UAE Mortgage Market with Enness

The UAE market offers ample opportunities for both residents and non-residents. Whether you're looking to purchase a property in Dubai, Abu Dhabi or another emirate, Enness can help you secure terms best suited to your financial situation.

Our team of experts provides personalised solutions and guidance, ensuring your purchase is as straightforward as possible.

Contact Enness today to discover if we can help you navigate the UAE market.