Home Loan Interest Rate in Dubai: What Banks Offer

Home Loan Interest Rate in Dubai: What Banks Offer

Here is what you need to know about the home loan conditions banks are offering in 2023. The programmes listed below are available not only to the UAE citizens but for expat residents as well.

An Overview of Home Loans in Dubai

Mortgage loans in Dubai, just like the United Arab Emirates as a whole, have become noticeably more expensive in the past 18 months. On average, interest rates have risen from 2% in January to 5% in December 2022, and continue to rise gradually.

This increase was a response to the growth of the interbank EIBOR rate, which until recently, served as a reference for most mortgage interest rates. The 3 Months EIBOR (the interest rate at which banks borrow funds from each other with a maturity of three months, to which variable mortgage rates are linked) rose from 0.22% in January 2022 to 4.99% in April 2023. Economists in several Middle Eastern media have forecasted that the value of this rate will continue to increase for at least a year, as the US Federal Reserve rate is rising, and the UAE dirham is pegged to the dollar.

This has led to a decline in mortgage activity. For instance, in Dubai, according to the Emirate's Land Department (DLD), 16.7 thousand mortgage deals were concluded in 2022, which is 14.5 percent less than the previous year. Additionally, after a long period when almost all mortgage rates were linked to EIBOR, the market has seen the emergence of a significant number of fixed-rate offers. However, it should be noted that regardless of the loan term, the rate in such banking products is fixed for no more than five years, but in most cases, it is for one, two, or three years.

Any bank reserves the right to offer a client a higher interest rate on a loan than the one declared on its official website. This can happen after the completion of the underwriting process, during which the bank studies the credit history of the potential borrower, along with information about their career level, growth, and other relevant details.

First Abu Dhabi Bank (FAB)

The FAB offers loans with a mortgage rate of 5.24% per annum, which is fixed for one, three or five years. For customers who receive their salaries on their account in this bank, there are more favourable conditions: mortgage rates start at 3.99% per annum fixed for one year, from 4.24% per annum fixed for three years, and from 4.49% per annum fixed for five years.

This bank also offers a programme with a rate linked to 3 Months EIBOR: for home loans, the bank charges 0.55% plus 3 Months EIBOR for the first year and 1.5% plus 3 Months EIBOR for the second year. Thereafter, the rate is revised based on market conditions.

The maximum loan amount at this bank is 20,000,000 AED (about $5,446,000). Income requirements are at least 15,000 AED per month ($4,088). The borrower’s own funds for the down payment should be at least 15% of the value of the property to be purchased.

Mr. C Residences (Housearch)

Emirates NBD

This bank offers mortgage loans at a rate of 5.29% per annum, fixed for two years. The maximum amount the bank can lend is 20,000,000 AED (about $5,446,000) or 84 monthly salaries of the borrower (the bank will prefer to lend the smaller of these amounts).

In addition, the bank has a variable rate mortgage loan offer: 1.99% plus 1 Month EIBOR. This is the only loan on this list that is tied to this particular interbank rate. As a rule, the three-month rate is slightly lower than the one-month rate, but since the difference between them is calculated in hundredths of a percent, the client may not notice this or may not care.

The minimum income required to get a loan is 15,000 AED ($4,088). The borrower’s own funds for the down payment should be at least 20% of the cost of the purchased housing.


This bank offers a Home in One mortgage product with a variable rate with a minimum of 1.04% per annum plus 3 Months EIBOR and a maximum of 1.74% per annum plus 3 Months EIBOR.

Fixed rates at Rakbank start at 4.84% and go up to 5.54% per annum. These terms are valid for the first three or five years after which the fixed rate changes to a variable rate ranging from 1.84% per annum plus 3 Months EIBOR to 2.24% per annum plus 3 Months EIBOR.

The minimum income to qualify for a loan is 15,000 AED ($4,088) per month. The maximum amount the bank would be willing to lend is 20,000,000 AED (about $5,446,000). The amount of the borrower’s own funds for the down payment is not specified.

The Home in One programme has one peculiarity: if the client places a deposit in the same bank, then in the future the mortgage interest is accrued not on the entire amount of the loan, but the amount of the deposit excluded. For instance, if the loan amount is 600,000 AED and the deposit is 200,000 AED, interest is charged on 400,000 AED.

The Sanctuary (Housearch)

Standard Chartered Bank (SCB)

The SCB offers variable rate mortgages at 1.49 per cent per annum plus 3 Months EIBOR. The minimum income that the bank requires to issue a loan is 10,000 AED ($2,723) per month.

The maximum loan amount is 18,000,000 AED (about $4,900,000). The borrower must pay at least 25% of the value of the selected property as a down payment from their own funds.

Each mortgage borrower receives priority banking services at the SCB, a discount on the bank's fees for any transactions, as well as high cash withdrawal limits.

Commercial Bank of Dubai (CBD)

The CBD offers fixed rate mortgages on the following terms and conditions: the rate of 5.2% per annum is effective for the first year and then replaced by a variable rate equal to 1.79% plus 3 Months EIBOR.

Option Two: the rate of 4.75% per annum is fixed for three years and then replaced with a similar variable rate. The bank also provides home loans with a variable rate equal to 1.39% per annum plus 3 Months EIBOR for the entire term of the loan.

The minimum income level for a CBD home loan is 12,000 AED ($3,268) per month. Down payment must be made from the borrower’s own funds in the amount covering at least 20% of the value of the property purchased. The maximum loan amount that the bank would be willing to approve is 10,000,000 AED (about $2,723,000).

The Highbury (Housearch)

In a Nutshell

Banks operating in Dubai have become more open to issuing fixed-rate home loans. However, none of them is willing to finance the purchase of residential real estate while maintaining the same interest rate throughout the whole loan term. All variable interest rates depend on the EIBOR interbank interest rate, which has been continuously growing. Therefore, it may be more profitable to take out a fixed-rate loan and carefully monitor the EIBOR dynamics to choose a suitable time for refinancing your loan if necessary.

Cover photo: Iva Prime (Pexels)

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