Understanding Dubai Mortgage Options for Non-Residents

Can non-residents get a mortgage in Dubai?

Before delving into Dubai’s mortgage options for non-residents, let us address the most important question. As someone who doesn't live in Dubai, are you even eligible for a mortgage? The short answer is yes. However, as a foreigner, you will have to follow a different set of non-resident home loan rules in Dubai. 

It is important to note that while you can avail of relatively high loan amounts and enjoy increased flexibility while repaying your mortgage, there will be limited mortgage options for you to select from. It is recommended to not only conduct due diligence but consult a Dubai mortgage broker before proceeding with one. 

Types of mortgages available for non-residents in Dubai

There are varying options for home loans in Dubai for non-residents. Understanding the different kinds of mortgage options and their interest rates will give you clarity on what works best for you. 

The different types of non-resident mortgages in Dubai include:

Fixed-rate mortgage: With a fixed-rate mortgage, the interest rate that you pay does not change for a set period, usually between one to five years. After this, the interest rate switches to becoming variable, meaning it will change with market fluctuations.

Variable rate mortgage: The interest rate for this mortgage is adjustable depending on market conditions. Those applying for this mortgage must ensure they are prepared for the possibility that their monthly repayments could rise or fall during the mortgage term.

Discounted rate mortgage: Discounted rate mortgages generally offer lower interest rates (especially for first-time buyers) over a two to five-year period, before reverting to a higher rate.

Capped mortgage: Amongst the many schemes for international mortgage in the UAE, the capped mortgage is a popular home mortgage option. In this scheme, your payments can be at variable rates, but a maximum cap will be set before your loan term begins. While the capped period may only be implemented for a brief period, the interest rates may increase depending on market conditions.

Eligibility criteria for non-resident mortgages

While there are several mortgage options for non-residents in Dubai, you should ensure that you meet the city’s eligibility criteria before applying for one.

Bear in mind that while this article will list down the general criteria for non-resident mortgages in Dubai, the rules may differ from bank to bank. 

The eligibility criteria are as follows: 

• Each UAE bank has a list of eligible countries. You must be a citizen of one of those countries in order to apply for a mortgage. 

• Anyone applying for a non-resident home loan must either have a monthly income or must be self-employed. 

• Certain banks may pose age restrictions for expat mortgage seekers. Do your research to understand if the bank you wish to go with has an age bar. 

• Each bank has a minimum monthly income requirement for salaried individuals. Home loan in Dubai for non-residents may have a different income requirement from expats and UAE Nationals.

• Certain banks also have a list of approved property developers - whose projects one can obtain a mortgage for. If you come across such a criterion, ensure that the property and project you are looking to buy match the criterion. 

Deposit requirements for non-resident mortgages

A critical part of getting a mortgage in Dubai is ensuring you have a suitable deposit, or downpayment, as this is required by UAE law.

Whilst for residents of Dubai, the deposit requirements are at least 20% for expat mortgages and 15% for UAE Nationals, the downpayment requirements are higher for non-residents.

For non-residents looking to buy a property in Dubai using a mortgage, most banks require a downpayment of 40%-50% of the property's value.

How to apply for a non-resident mortgage in Dubai

It is crucial to understand the process of Dubai mortgages for non-residents. Here are some steps that can be helpful in your property mortgage journey: 

1. Speak to a Dubai-based mortgage consultant. They can help you explore all mortgage options and narrow down the suitable products based upon your unique circumstances. This will save you significant time and effort given the number of mortgage providers and products in Dubai.

2. With the help of the mortgage broker, select a mortgage that best suits your needs, financial circumstances, and more. 

3. Obtain the finance pre-approval by submitting the required paperwork. 

4. You will then receive a letter from the bank, confirming that it will lend money to you. 

5. Work with an experienced real estate agent to find the perfect property that meets your requirements.

6. Once you have found the right property, your agent will negotiate on your behalf. Ensure that you have agreed upon the purchase price of your desired property with the seller. 

7. Pay the property deposit to secure your sale. 

8. Work with the mortgage broker and a conveyancer to process both the mortgage and the property transfer.

What documents are required to obtain a mortgage in Dubai as a non-resident?

An important process within Dubai mortgages for non-residents is collating, filling, and submitting appropriate documentation to all relevant authorities, including the bank, real estate agent, RERA, and more. 

Usually, these are the following documents you will be required to submit as per international mortgage UAE laws: 

• A valid passport 

• Bank statements from the past three to six months (depending on the bank’s criterion) to showcase proof of funds 

• Tax returns (if applicable) 

• Salary slips (for salaried individuals) 

• Trade license and audited financial statements (for self-employed individuals) 

• Details of any preexisting loans (if applicable) 

Conclusion

While applying for a non-resident mortgage in Dubai may seem like a challenging endeavor, it is a highly popular option for many international investors who want to benefit from the exciting opportunities in this thriving real estate market.

A mortgage can be a great help to those who wish to fulfill their dream of owning a property in Dubai, one step at a time. 

When it comes to choosing from the abundant properties in Dubai, Engel & Völkers has been consistently committed to helping you find your dream home. With over 45 years of experience and over 13,000 expert real estate agents, Engel & Völkers is here to address all your home investment needs - be it understanding mortgages in Dubai or finding your perfect property.

Contact us at +97144223500