Aug 24, 2025
Buying Guides
Thinking about buying property in Dubai? It’s an exciting step, and for many people, it’s a smart way to build long-term wealth. The city’s mix of luxury living, a famous skyline, and investor-friendly policies draws buyers from all over the world. That said, financing a property here isn’t always straightforward, so it’s a good idea to go in with a clear plan.
Whether you’re new to real estate, an expat settling in, or someone with investment experience, knowing your financing options can really pay off. In this guide, we’ll break down the main routes you can take and offer a few tips to help make the whole process feel a bit easier.
Exploring Mortgage Options
For a lot of buyers, getting a mortgage is the most straightforward way to finance a property in Dubai. The UAE has a solid, well-regulated banking system, and there are plenty of lenders offering mortgage options for both residents and non-residents. That said, the terms can differ quite a bit depending on whether you live in the country or not, so it’s worth looking into the details before you commit.
Mortgage Options for Residents
The Loan-to-Value Ratio (LTV) is a crucial factor in mortgage options. It represents the percentage of the property's value that a bank can finance. For residents, UAE banks can finance up to 80% of the property’s value for first-time buyers purchasing a property worth up to AED 5 million. For properties priced above AED 5 million, the maximum LTV is 70%.
Eligibility: To qualify, you’ll need to demonstrate:
Proof of stable employment or business income.
A strong credit history with no defaults.
Monthly income that meets the bank’s requirements (usually a minimum of AED 15,000 for salaried individuals or AED 25,000 for business owners).
Mortgage Options for Non-Residents
Non-residents are also eligible for mortgages in Dubai, albeit with slightly stricter terms:
LTV for Non-Residents: Typically ranges between 50-60% of the property value, depending on the lender.
Required Documents: Non-residents must provide: A valid passport.
Bank statements for the last 6-12 months.
Proof of stable overseas income.
Interest Rates and Tenure
Interest rates vary but typically fall between 3-5% annually, depending on market conditions and the buyer's creditworthiness. Mortgage terms can extend up to 25 years, allowing flexibility in repayment.
Developer Financing
If you’re considering off-plan properties, developer financing is a flexible and reassuring option. Many real estate developers in Dubai offer attractive payment plans designed to ease the financial burden, providing you with peace of mind as you navigate the property-buying journey.
How Developer Financing Works
Post-Handover Plans: Developers often allow buyers to pay up to 50% of the property price in installments, even after the property is handed over to them.
No Interest Rates: Unlike traditional mortgages, developer financing typically does not charge interest. However, this is reflected in the slightly higher prices of off-plan properties compared to completed units.
Payment Flexibility: Payment schedules are spread over 3-10 years, depending on the developer’s terms.
Advantages of Developer Financing
No need to involve banks or secure external financing.
Ideal for buyers with limited liquidity who prefer paying in smaller installments.
What to Watch Out For
Read the contract carefully to check for hidden fees, such as administrative charges, and be mindful of penalties for late payments.
Cash Purchases
For buyers with sufficient savings or access to significant liquid funds, an all-cash purchase is the most straightforward option. This approach is popular among high-net-worth individuals and international investors.
Benefits of Buying Property in Cash
Quick Transactions: Without the need for loan approvals, transactions can be finalized much faster.
Lower Costs: Cash buyers save on interest payments and administrative fees associated with mortgages.
Negotiation Power: Sellers are often more inclined to offer discounts or better terms to cash buyers.
Considerations
Paying in cash can be tempting because it comes with its benefits, but it also means a big upfront payment. Before going this route, make sure that tying up such a large sum won’t put a strain on your finances or leave you short on liquidity for other expenses.
Islamic Financing
Islamic financing, or Sharia-compliant financing, is a great option for buyers looking for ethical, interest-free financial solutions. This option is available to both Muslims and non-Muslims. It works on principles that steer clear of charging interest. Two common types of Islamic financing are Ijara (Lease-to-Own) and Murabaha (Cost-Plus Financing).
Common Types of Islamic Financing
Ijara (Lease-to-Own):
The bank purchases the property and leases it to the buyer.
Ownership transfers to the buyer at the end of the lease term.
Murabaha (Cost-Plus Financing):
The bank buys the property and resells it to the buyer at a pre-agreed profit margin.
Repayments are made in fixed installments.
Benefits of Islamic Financing
Follows ethical guidelines that avoid charging interest.
Provides clear, predictable payment schedules.
Drawbacks
Sharia-compliant financing is generally more expensive than traditional mortgages due to higher administrative fees and profit margins.
Additional Costs to Plan For
Financing your property purchase is about more than just the down payment or loan repayment. Buyers must also account for several additional costs, such as:
Dubai Land Department (DLD) Fees: A 4% transfer fee of the property price.
Mortgage Registration Fee: Charged at 0.25% of the loan amount, plus AED 290 in administrative costs.
Agent Commission: Typically 2% of the property price.
Service Charges: Annual fees to maintain shared spaces like lobbies, gyms, and pools (AED 10-30 per square foot on average).
Tips for Financing Your Property Purchase
Define Your Budget:
Determine how much you can comfortably afford without overextending yourself financially.
Factor in additional costs, like registration fees and service charges, to get a clear picture of your total expenses.
Shop Around:
Compare mortgage offers, developer payment plans, and Islamic financing options to find the best deal.
Consult a mortgage broker or financial advisor for tailored advice.
Understand the Fine Print:
Read loan agreements and financing contracts carefully.
Seek legal advice to ensure you fully understand the terms and avoid unexpected surprises.
Get Pre-Approval:
Apply for mortgage pre-approval before searching for properties. This helps you determine your budget and shows sellers you’re serious.
Maintain a Good Credit Score:
A strong credit history is essential to securing favorable loan terms.
Financing a property in Dubai takes some careful thought and a solid understanding of your options. Whether you’re drawn to the flexibility of a mortgage, the convenience of developer financing, the simplicity of paying cash, or the ethical benefits of Islamic financing, there’s a choice that fits every buyer. With some careful planning, comparing your options, and getting advice from experts, you'll be in a great position to make a wise investment in one of the world’s most exciting real estate markets.
With the right financial strategy, your dream of owning property in Dubai can become a reality.
Check out our comprehensive walkthroughs of the process:
The UK Investor's Guide to Buying Property in Dubai
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