List of Mortgage updates in UAE 2020

1. Mortgage Updates 2020
– Compare4Benefit

2. Mortgage Updates 2020
▪ When you are facing financial issues in your life or want to make a big purchase and you are
facing difficulties so that you can easily sort out big things so for the same mortgage will help
you.
▪ Even now also due to COVID-19 there are huge losses in financial status of countries. People
are facing many challenges in personal and business life.
▪ At this point in March 2020 ,Central bank of the UAE has made new initiatives to help those
facing financial difficulties at this time.
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3. New Initiatives Introduced in Mortgage
Market
• Real estate fee in Abu Dhabi removed
▪ Postpone Mortgage payment
▪ Fall in interest rates
▪ Reduction or zero Processing fee
▪ Increase in loan-to-values
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4. Real
Estate fee
in Abu
Dhabi
removed:
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5. Real Estate Fee in Abudhabi Removed
• Now buying in Abu Dhabi has become even more cheap.
▪ There is reduction in the processing fee and waivers from the banks.
▪ The administration has announced that there will be no registration
fees for 2020 when purchasing in capital.
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6. Postpone
Mortgage
payment:
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7. Postpone Mortgage Payment
▪ All of us are facing difficulties in the present time, as such one of the key initiatives
introduced by the CBUAE relates to mortgage payment holidays.
▪ In UAE there is temporary relief up to 6 months to the customers who are not able
to make repayments of mortgage due to disease and it is requested by Central
bank management.
▪ These postponed repayments can also be applied to new first time buyers.
▪ Persons who have mortgage and they are facing problems now a days during
COVID-19 they can directly contact there banks for the same as the CBUAE has
appealed to the banks for the same.
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8. Fall in
interest
rates
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9. Fall in interest rates
▪ Since the end of 2019 we have seen rate reductions from the US Federal Reserve (US Fed),and as the UAE is
pegged to the US dollar, we have seen interest rates in the UAE come down too.
▪ Central bank of UAE has lowest interest rates at this time due to the reductions from the US Fed from last few
months. As we know that mortgage things and interest rates are most competitive as we always see in the
mortgage market. But now it is available at a fixed rate of 2.07%. These decrease in percentage or fixed
percentage is really helpful and good opportunity for the people who really want to take mortgage.
▪ There is no commitment that these rates will remain constant for longer period.
▪ The persons who already have variable rates mortgage check out with your banks or loan issuers so that they
can also give to this good fixed rate for the coming months so that you can get reductions in your repayments.
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10. Zero or
reductions in
Processing
Fee
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11. Zero or reductions in Processing Fee:
▪ As informed above that some initiative has been taken by Central bank of UAE, so
it is the other initiative of rejecting the processing fee while applying for any
mortgage. Some banks have made reduction or put fee waivers to cover upfront
costs when purchasing a property.
▪
This initiative combined with the reduced down payment requirements help to make
buying more affordable .
▪
If you are considering remortgage , it is worth noting that most banks will also allow
fee rejections and reductions for remortgage as well as new mortgage.
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12. Increase in
loan- to-
values:
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13. Increase in loan- to-values
▪ The CBUAE has allows banks in the UAE to increase the loan-to -values for the first time
buyers by 5% for both UAE nationals and foreigners which means now the foreigners are able
to borrow up to 80% of their property purchase price and UAE nationals up to 85%. It has
increase from 75% and 80%.
▪
By increase in LTV for buyers reduces the down payment required which is very biggest
challenge but don’t worry for the same now because the down payment required by foreigners
is now 20% and 15% for the UAE nationals.
▪
The difference of 5% is not the large amount but when we think of large amount it make huge
difference.
▪
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14. References
▪ https://www.compare4benefit.com/blog/best-mortgage-rates-in-uae-2018-money-
clinic/
▪ https://www.compare4benefit.com/blog/mortgages-dubai-complete-guide/
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