ADIB launches Istikrar, UAE’s ‘first’ long-term, fixed-rate home finance product

Abu Dhabi Islamic Bank (ADIB) has introduced Istikrar, the UAE’s first long-term, fixed-rate home finance offering.

The product provides customers a consistent, fixed monthly installment throughout the chosen tenor rate, eliminating any variations or fluctuations.

The new offering provides customers with more property financing options amid a high-rate environment.

Home finance is a long term financial commitment, and the decision between a fixed-term or floating-rate scheme is crucial for home buyers.

Fixed term schemes, unlike floating-rate home finances, offer stability and predictability for customers when managing their budgets.

Istikrar: What it offers customers

With rates starting as low as 4.89 per cent for five years with the possibility of the tenor to reach 20 years, installments will remain unchanged for homeowners.

Amit Malhotra, global head of Retail Banking, Abu Dhabi Islamic Bank, added:“Istikrar is an important milestone not just for ADIB, but for the UAE as a whole. Given the uncertain rate environment, we observed an increasing demand from our customers for a fixed-rate home finance option.

“Istikrar has been introduced to help in their financial planning and optimise their household budget. Our aim is to continue leveraging customer insights to introduce new offerings that support our customers’ goals of home ownership.”

According to the bank, the carefully designed fixed-rate tenor offers home buyers a worry-free experience, free from any large final payment or unexpected changes in installments. At the end of the loan term, customers won’t encounter any sudden financial burdens. Moreover, the bank’s loan structure ensures that their debt burden ratio (DBR) remains unaffected, enabling customers to comfortably manage their finances.

In other news, ADIB raised $750m US-dollar denominated additional tier-one (AT1) perpetual sukuk.

The Sharia-compliant lender said the Islamic bonds will be listed and traded on London Stock Exchange.

ADIB, which is rated A2 by Moody’s and A+ by Fitch, priced the perpetual non-call, five and half-year sukuk at a profit rate of 7.25 per cent per annum payable semiannually.

The issuance was met with robust demand, attracting interest from over 240 global and regional investors with the final order exceeding $7bn more than 9 times over-subscribed and final pricing 62.5 basis points (bps) tighter than the initial pricing thoughts.

Read: UAE issues measures to address impact of rising interest rates on property loans for citizens