While buying a property in Dubai might not be the first thing that crosses your mind when you first get here, many expats end up staying much longer than initially planned, paying hundreds of thousands of dirhams in rent. So, why not push all that hard-earned cash into your own asset, instead of someone else's? Once you realize you’re getting comfortable living and working in Dubai, it might be smart to look into buying property and getting a mortgage in Dubai, whether to live in, or rent out for extra income.
Buying property in Dubai is a level-up to securing your financial future. If you’re a first-time home buyer, this can sound daunting and complicated. And yeah, it is! But with the right guidance, it’s very, very doable. To help you out, we sat with one of our in-house mortgage experts, Darren Bridge, to cover some of the basics about getting a mortgage for a property as an expat in Dubai.
First things first to getting a mortgage in Dubai: your source of income
The bank needs to know that you’ll be able to pay back the money you borrow, and one way to assure them is having a fixed, stable income. The majority of expats earn a salary (and visa) by working as an employee at a company in Dubai, and the process to get a mortgage is pretty straightforward.
You’ll need a minimum salary of AED 10,000 per month
Most banks require minimum of 6 months employment at your current company, however, some banks will start process mortgage after one salary credit – depending on company you work for
The company you work for matters. Listed and reputable global companies are more easily trusted by banks. Smaller companies and freelancers might have a harder time.
How long should you have lived in the UAE?
“Technically, it should be 6 months,” according to Darren, “but anything is possible.” As long as you have a valid company visa, a qualifying salary, a local bank account, and an Emirates ID, and the upfront fees, you can apply for a mortgage.
Documents, documents, documents
Required documents vary slightly for salaried and self-employed individuals, but like most things in the UAE, you’re not getting anything done without these basic documents:
ID documents
Passport
UAE residence visa
Emirates ID
6 months’ bank statements
Salary certificate from your company
Proof of address (Ejari, DEWA, or phone bill)
As for nationality, foreigners from globally sanctioned countries may be restricted by certain banks, but as a resident of the UAE you should be able to get a mortgage, provided you fulfill all the regular requirements and criteria.
How much do you need to pay upfront?
TL;DR: You need to pay 20% of the property value upfront, and that doesn’t include the bank and other fees.
The bank will never lend you 100% of the price of the property. You need to ensure that you can afford 20% of the total property value from your own pocket in order to purchase a property.
Transactional fees can add up, too. This includes government fees (title deed, mortgage registration), bank fees (application, processing, property valuation) and other fees (real estate agents, brokers) and can total up to about 6% - 7% of the total property value.
How much can you borrow?
The amount you can borrow towards a mortgage will depend on a few factors:
The size of your salary
Your credit score (Check yours on the AECB Credit Report app!)
Any other personal loans or mortgages you might have
Curious? Use the Huspy eligibility calculator to check your eligibility and see an estimate of what you can borrow.
Other things to know:
You can only borrow 80% of the total amount of the property. The other 20% is paid as an initial deposit, or down payment, as mentioned above.
Banks will only lend a maximum of 7 times your annual income.
Some banks include financing of the upfront fees in your mortgage loan.
The maximum age at which you can get a mortgage in the UAE as an expat is 65 years old.
Which banks are best for expats?
This really depends on the market. Bank products and rates change all the time, so it’s best to speak to an expert mortgage consultant as they have their eyes on the changes in real time and can give the best advice at any given moment.
Can you leave the UAE if you have a mortgage?
Yes, you are able to leave the country. Your mortgage will still be live, and you may be subject to non-resident rates.
Finally, Darren’s tips for first-time expat homebuyers in Dubai:
Speak to a mortgage consultant
We knew he’d say that! But for real, this is likely the biggest transaction of your life. Despite the financial aspect, there is also a huge emotional cost involved. Let an expert walk you through your options so you can make an informed choice for your future.
Pay your bills on time
Settle your credit card, don’t spend too much of your salary, and try to keep your credit bureau score 700 or above to get better interest rates.
Get pre-approval regardless of what stage you’re at
Getting pre-approval for a mortgage proves that you’re committed and financially eligible to buy a property. It gives you the leverage you need to engage and negotiate with sellers or agents. It costs nothing, and can speed up the process on your dream property.
Clearly, getting a mortgage as an expat in the UAE requires some forethought and planning. And, as with just about any investment, there are many things to consider before you take the plunge, including your budget and how much property you can truly afford. But ultimately, it's all worth it—a mortgage is one of the most stable investments in the world today. And it's certainly one of the key ways to build security and stability for you and your family.
If you’re ready to start the process, head over to the Huspy Portal! If you have any questions not answered here or want to know what Huspy can do for you, just give us a call or send us an email. Darren or one of our other expert consultants will be ready to help!