How does a mortgage buyout or refinance work in the UAE?
Updated: · By Aknaz Mortgages, RERA ORN 48584
Refinancing moves your mortgage to a new bank or deal for a lower rate, better terms or extra cash, and the new bank pays off the old loan. You pay an early-settlement fee, usually 1% of the balance (some banks waive it after 5 years). Whether it pays off depends on the new rate and fees.
Who this is for
- Owners whose fixed-rate period is ending or has ended.
- Borrowers who want to compare the rate and terms of their current bank with the wider market.
- Owners who want to change the term or add a joint applicant.
- Owners who want to borrow the most they can: a buyout plus equity release in one step.
Key numbers
| Rule | Value |
|---|---|
| Fixed rate for 1 year | from 3.75% |
| 3-month EIBOR | 4.3% |
| Bank margin over EIBOR | from 1% |
| Maximum debt-burden ratio (all monthly repayments ÷ gross monthly income) | 50% |
| Maximum mortgage term | 25 years |
Sources: Current UAE bank offers; CBUAE EIBOR rates, 5 October 2026 fixing; CBUAE Mortgage Loans Regulation. Rates as of 3 November 2026, subject to bank approval and eligibility; rates change. Figures checked on .
How it works
- We compare banks. For your balance, income and property.
- The new bank approves you. It also values the property.
- Your bank issues a settlement letter. The new bank then pays off the old loan.
- The new mortgage is registered. At the Dubai Land Department.
What it costs
- Early settlement fee: usually 1% of the balance; some banks waive it after 5 years.
- New bank costs: mortgage registration, a processing fee (can be waived) and a valuation.
- The new rate: fixed rates for 1 year from 3.75%, as of 3 November 2026, subject to bank approval and eligibility; rates change.
Want more cash too?
A buyout can be combined with equity release: the new bank may lend more than your balance if the property’s value and your income allow it.
We do the numbers
You do not need to work any of this out yourself. Your advisor checks your figures against each bank’s rules, tells you which banks fit and what you can borrow, and submits your application the same day.
How long it takes
The new bank approves your application and values the property. The old bank issues a settlement letter. The new mortgage is registered at the Dubai Land Department.
Frequently asked questions
How much is the early settlement fee?
Usually 1% of the outstanding balance, and some banks waive it after 5 years with the same bank. On a AED 1,600,000 balance, 1% is AED 16,000. Check the early settlement clause in your contract, because the exact amount and any waiver vary by bank.
When is a buyout worth it?
When the monthly difference between your current instalment and the new one, over the time you will keep the loan, exceeds the settlement fee plus the new bank's fees. We work out the break-even in months for you before you decide. A lower rate is never certain, and banks decide each case.
Can I release cash during a buyout?
Sometimes. A bank may lend more than the current balance if the property value and your income allow it, within the Central Bank's lending limits. That is equity release, which has its own page. The amount depends on the valuation, the DBR and the bank's policy.
Does a buyout need a new valuation?
Banks normally value the property again when they take over a mortgage, because the new loan is secured on it. Valuation fees start from AED 2,500 and vary by bank. Ask the new bank whether it will accept a recent valuation to avoid paying twice.
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