How does a mortgage work when buying a resale property in Dubai?
Updated: · By Aknaz Mortgages, RERA ORN 48584
The bank values the property and issues a final offer, then the transfer and mortgage registration happen at a DLD trustee office. If the seller has a mortgage, it is settled as part of the transfer. The buyer pays the DLD fee of 4% of the price and the other fees itemised below.
Who this is for
- Buyers purchasing a ready home from a private seller.
- Buyers whose seller still has a mortgage on the property.
- Buyers who have signed or are about to sign the memorandum of understanding.
Key numbers
| Rule | Value |
|---|---|
| Maximum debt-burden ratio (all monthly repayments ÷ gross monthly income) | 50% |
| Maximum loan-to-value, expat first home below AED 5,000,000 | 80% |
| Maximum loan-to-value, second property | 60% |
| Maximum mortgage term | 25 years |
Sources: CBUAE Mortgage Loans Regulation; UAE bank practice (varies by bank). Figures checked on .
What banks look for
- You. Your income and monthly repayments must pass the debt-burden limit in the key numbers above.
- The property. The bank values it and lends on the lower of the price and the valuation.
- The paperwork. Clear title documents, and a settlement letter if the seller still has a mortgage.
The steps
- Pre-approval. You learn your budget before you make an offer.
- MOU. You and the seller sign the price, the deposit and the deadline.
- Valuation. The bank values the property.
- Final offer. The bank issues the offer letter, and you accept.
- Seller’s mortgage. If there is one, the seller’s bank issues a settlement figure.
- Transfer. At a DLD trustee office the title transfers, the mortgage is registered and the funds are released.
Costs on top of the price
The purchase fees are listed one by one in the FAQ below.
How long it takes
Pre-approval, MOU, valuation, final offer, then transfer. The MOU sets the transfer deadline, so everything must fit inside it.
Frequently asked questions
What if the seller still has a mortgage?
The seller's bank issues a settlement figure and a no-objection letter, and the seller's loan is paid off as part of the transfer, usually with funds from your mortgage. The seller's early settlement fee is theirs to pay. Your advisor coordinates the two banks and the trustee office.
What is a valuation and who pays it?
A valuation is the bank's independent estimate of the property's market value, and it caps the loan. The buyer normally pays it. It starts from AED 2,500 and varies by bank. If the valuation is below the price, the loan falls and your cash contribution rises.
What fees are due on transfer day (itemised)?
DLD transfer fee 4% of the price plus AED 580 title deed issuance; mortgage registration 0.25% of the loan plus AED 290; agency usually 2% plus 5% VAT, which may be negotiable; bank processing fee up to 1% plus VAT, which can be waived; valuation from AED 2,500; trustee office about AED 4,515.
Can the bank reject the property?
Yes. A bank can decline a property after valuation or legal checks, for example when the valuation is below the price or the title documents are incomplete. Your pre-approval stays valid for 30–90 days depending on the bank, so ask us to check the property early.
Related guides and tools
Sources
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