UAE Central Bank Confirms Mortgage Caps

First time expat buyers will have mortgages limited to 75 per cent of a property’s value with UAE nationals limited to 80 per cent.



Sultan bin Nasser al-Suweidi.

The UAE Central Bank has confirmed the long awaited new mortgage caps for the country, governing bank lending to property buyers.

The highly anticipated new rules will limit mortgages for first time expat buyers to 75 per cent of a property’s value of less than Dhs5 million, with UAE nationals limited to 80 per cent.

Expat buyers will have loans restricted to 65 per cent for homes valued over Dhs5 million, with Emiratis receiving 70 per cent.

For subsequent property purchases, expats will have mortgages reduced to 60 per cent of the new home’s value, with nationals restricted to 65 per cent.

All mortgages for all nationalities when buying off-plan properties, no matter their value, will be capped at 50 per cent.

The caps were originally due to be set at 50 per cent for first time foreign buyers and 70 per cent for nationals, but these figures were revised after a proposal by the banks.

“The Central Bank is seeking to ensure that banks and other financial institutions have and maintain effective business standards and control frameworks in place for the granting of mortgage loans,” Sultan Bin Nasser Al Suwaidi, governor of the Central Bank, said in a statement.

Loans will be limited to a maximum of 25 years while repayments cannot surpass 50 per cent of a customer’s monthly income or total more than seven years’ annual income for expats and eight years for nationals.

The new caps are intended to act a safety measure for the booming property market, with prices rising more than 20 per cent this year.