How Many Years Is a Home Loan in Dubai?

Are you dreaming of owning a home in Dubai but finding it challenging to gather the funds? Many potential homeowners face the same issue of not having enough money upfront to buy a house. This is where a home loan can come to the rescue. By spreading the cost of a home over many years, a home loan makes it possible to manage your finances better and turn your dream of owning a home into a reality.

Dubai - Burj Khalifa ; How many years is a home loan in dubai

However, before applying for a home loan in Dubai, it’s crucial to plan how you’ll repay it. One of the most important aspects of this planning is understanding the loan tenure. Today, we’re going to answer a frequently asked question: “How many years is a home loan in Dubai?” Let’s dive into the details.

Common Mortgage Loan Tenures in Dubai

In Dubai, banks generally offer home loan tenures ranging from 5 to a maximum loan period of 25 years. Here’s a breakdown of the loan maturity you can typically expect:

Short-Term Loans (5-10 years): These loans are suitable for those who can afford higher monthly payments and want to pay off their mortgage quickly. They often come with lower interest rates, resulting in less interest paid over the life of the loan.

Medium-Term Loans (11-20 years): This is the most common tenure chosen by borrowers. It provides a balanced approach, offering manageable monthly payments while still keeping the total interest paid relatively moderate.

Long-Term Loans (21-25 years): Ideal for those who prefer lower monthly payments, even though the total interest paid over the life of the loan will be higher. This option provides maximum flexibility for managing monthly budgets.

Note: Most banks in Dubai offer flexibility in tenure selection, allowing you to tailor the mortgage loan amount to your needs.

Implications of Different Loan Tenures Mortgage in the UAE

Monthly Payments

If you choose to apply for a mortgage with a shorter loan tenure, say 10 years, your monthly payments will be higher. This is because you have less time to pay off the loan, so each installment needs to cover a larger portion of the principal amount along with interest.

On the other hand, a longer loan tenure, like 25 years, will result in lower monthly payments. The loan amount is spread over a longer period, reducing the amount you need to pay each month.

Overall Interest Costs

With a shorter loan tenure, even though your monthly payments are higher, you end up paying less in interest over the life of the loan. This is because the interest is calculated on the outstanding principal, which reduces faster with higher payments.

A longer loan tenure means paying more in interest overall despite the lower monthly payments. The extended period allows interest to accumulate, further increasing the total amount paid over the life of the loan-to-value ratio.

Early Settlement Options

If you have a shorter loan tenure and decide to pay off your loan early, the savings on interest will be less compared to a longer tenure because the interest burden is already lower.

With a longer loan tenure, early settlement can significantly reduce the total interest paid. However, some banks may charge early settlement fees, an important factor to consider.

Factors Influencing Home Loans Tenure

When considering a home loan in Dubai, several factors can influence the duration of the loan, known as the loan tenure. Your mortgage broker should be able to help, but here is a detailed breakdown of these factors:

1. Bank Policies

Banks have specific rules and policies determining maximum and minimum loan tenures. These rules are based on the bank’s risk assessments and regulatory guidelines. For example,Emirates NBD offers home loan tenures of up to 25 years, provided the borrower meets the minimum monthly salary requirement of AED 15,000.

2. Income and Eligibility

A higher income often means you can get a longer loan tenure. Banks consider your income level as a key factor in assessing your ability to repay the loan. People with stable, well-paying jobs, particularly in reputable companies, are more likely to get favorable loan terms. Self-employed individuals may face more stringent scrutiny. For example, HSBC requires a minimum salary of AED 20,000 and offers loan tenures up to 25 years. ADCB offers better terms for employees of well-established companies.

3. Mortgage Loan Amount and Interest Rates

The amount of the loan and the interest rate applied are crucial in determining the tenure. Larger loan amounts typically result in longer tenures to ensure manageable monthly payments. Lower interest rates are usually associated with shorter loan tenures, while higher rates may necessitate longer repayment periods to keep monthly payments affordable.

For example, Dubai Islamic Bank provides loans up to AED 1,500,000 with a tenure of 25 years. ADCB offers lower interest rates for shorter tenures, like 15 years.

4. Early Settlement Options

Some banks allow borrowers to pay off their loans early, but this often comes with a penalty fee. Early settlement can save money on interest over the long term but requires careful consideration of the fees involved. For example, Mashreq Bank charges a fee of 1-2% of the outstanding loan amount for early settlement.

5. Personal Financial Goals

Your own financial objectives significantly impact the choice of loan tenure. A longer tenure will be more suitable if you prefer lower monthly payments. On the other hand, if you aim to be debt-free sooner, a shorter tenure with higher monthly payments would be the better choice. For example, HSBC offers a 10-year tenure option, which is ideal for those planning to retire early and wish to clear their debt before retirement.

6. Lender Preferences

Banks often provide better terms to their long-term customers or those with significant savings accounts. An established relationship with the bank can lead to more favorable loan tenures and conditions.

For example, Emirates NBD gives favorable terms to their existing customers, which can result in better loan conditions.

7. Market Conditions

The current economic environment affects loan tenures, including interest rates and inflation. Longer tenures might be more attractive during low interest rates as they reduce the monthly repayment burden.

For example, ADCB offers longer tenures during low central bank interest rates, which can help borrowers manage their monthly repayments more easily.

8. Property Type and Value

The type and value of the property you intend to purchase can also influence the loan tenure. Higher-value properties often come with longer tenures due to their lower risk profile. Ready properties might be eligible for longer loan terms compared to off-plan properties, which are considered riskier.

For example, Dubai Islamic Bank offers longer tenures for high-value properties like luxury villas but shorter tenures for off-plan properties.

9. Credit Score

Your credit score plays a significant role in determining your loan tenure. A higher credit score indicates better creditworthiness, which can lead to more favorable loan terms and possibly longer tenures.

For example, borrowers with a credit score above 750 may receive better loan terms and longer tenures.

10. Age of Borrower

The borrower’s age at the time of loan application can influence the tenure. Younger borrowers may be eligible for longer tenures than older borrowers, as banks consider the remaining working years. For example, In the UAE, the maximum loan term is typically up to age 65 for salaried employees and 70 for self-employed individuals.

11. Employment Stability

Stability in your job or business is another factor. Long-term employment in a reputable company can result in better loan terms and longer tenures. For example, employees with long-term contracts in established companies often receive more favorable loan terms.

12. Debt-to-Income Ratio

Banks look at your debt-to-income ratio, which is the amount of debt you have compared to your income. A lower ratio suggests better financial health, which can influence loan tenure positively. For example, borrowers with lower debt obligations will likely get longer loan tenures.

Understanding these factors can help you decide on the right home loan tenure for your needs. Always consider your financial situation, long-term plans, and the specific policies of the bank you choose to work with.

Understanding Early Settlement Options

Early settlement means paying off your home loan before the end of its term. This can save you money on interest and give you financial freedom sooner. Here’s what you need to know:

Benefits of Early Settlement

Save on Interest: Paying off your loan early reduces your total interest because interest is calculated on the remaining balance.

Financial Freedom: Being debt-free sooner allows you to use your money for other investments or expenses.

Better Credit Score: Successfully repaying a loan can boost your credit score, which helps with future loans.

Penalties and Fees

Early Settlement Fee: Typically 1% to 2% of the remaining loan balance.

Processing Fees: Additional fees might be charged for handling the repayment.

Tips for Effective Early Repayment

  • Understand Terms: Check your loan agreement for early settlement fees and conditions.
  • Partial Prepayments: Reduce the principal by making extra payments periodically without paying a large settlement fee.
  • Financial Review: Regularly assess if you can afford extra payments to shorten the loan term and reduce interest.
  • Consult Your Bank: Discuss early settlement options and possible fee negotiations with your bank.
  • Plan for Windfalls: Use bonuses or other financial gains to pay down your loan faster.

Which Loan Tenure Should You Choose?

When looking for a personal loan as an expat in the UAE, it’s important to consider factors such as interest rates, repayment terms, and eligibility criteria. Here are some top options:

1. Emirates NBD: Minimum Salary, AED 5,000

Benefits: Quick processing with features like InstaLoan for pre-approved loans with minimal documentation. Ideal for short-term cash needs like medical expenses or emergencies.

2. ADCB (Abu Dhabi Commercial Bank): Minimum Salary, AED 8,000

Benefits: It offers competitive interest rates and flexible repayment options. It is also known for good customer service and ease of application.

3. Mashreq Bank:  Minimum Salary, AED 7,000

Benefits: It provides personal loans with attractive rates and quick approval times. It also offers various loan packages tailored to different needs.

4. RAKBANK: Minimum Salary, AED 5,000

Benefits: They are known for their straightforward loan application process and customer-friendly policies. They offer loans with flexible repayment periods and competitive rates.

We’ve reviewed these banks for the property loan in UAE in a separate article. You should give it a read!

Tips for Selecting the Right Loan

Income Stability: Ensure your income is stable enough to handle monthly repayments. A higher and more stable monthly income also can help secure better loan terms.

Affordability: Look at your minimum monthly income and expenses and determine how much you can comfortably repay each month. Choose a loan tenure that fits within your budget without causing financial strain.

Long-Term Financial Goals: Future Plans: Think about your long-term financial goals. If you plan to make large purchases or investments in the future, a shorter loan tenure might help you become debt-free sooner and save on interest costs.

Market Trends: Interest Rates: Pay attention to current interest rates. During periods of low interest rates, opting for a longer tenure to lock in lower monthly mortgage payments thereafter might be advantageous.

Here is the table of home loan scenarios with different values for loan amounts, interest rates, and tenures in Dubai:

Loan Amount (AED)Interest Rate (%)Tenure (Years)Monthly Payment (AED)


What documents are typically required to apply for a home loan in Dubai?

Unlike car loans, to apply for a home loan in Dubai, you generally need to provide proof of identity (such as a passport and visa), proof of residence, salary certificates or proof of income, bank statements for the last six months, and details of any existing loans. Self-employed individuals may need to provide additional documents, such as business registration and financial and personal bank statements too.

Can non-residents apply for a home loan in Dubai?

Yes, non-residents can apply for home loans in Dubai. However, the eligibility criteria and terms might be more stringent compared to residents. Non-residents often need to provide a higher down payment and might face higher interest rates. It’s important to check with specific banks for their policies regarding non-resident borrowers.

What is the maximum loan-to-value (LTV) ratio allowed for home loans in Dubai?

The maximum loan-to-value (LTV) ratio in Dubai typically varies based on the property value, property insurance, type, and the borrower’s residency status. For first-time expatriate buyers, the LTV can be up to 75% for properties valued under AED 5 million and 65% for properties valued over AED 5 million. For UAE nationals, the LTV can be up to 80% for properties valued under AED 5 million and 70% for properties valued over AED 5 million.

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