Interest rates on mortgages sliding

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The international banking giant HSBC has become the latest lender to cut interest rates in the UAE. HSBC brought down rates on conventional and Islamic mortgages to 5.49 per cent for new customers who put down a 40 per cent deposit. The bank also cut down arrangement fees for its existing customers. HSBC now offers the one of the country’s lowest rates for conventional mortgages, although with higher deposit requirements than are applied by others.

Tamweel, the home finance firm majority owned by Dubai Islamic Bank, has recently launched a promotional mortgage offer at 4.99 percent a year. The cut in interest rates is likely to deliver great value to customers with more lenders reducing mortgage rates in recent months.

In January, Abu Dhabi Finance, the capital’s largest mortgage lender, announced rates of 5.75 percent, on conventional mortgages in the country. It requires a deposit of 15 percent of the purchase price.

Pertinently Standard Chartered announced bundling mortgages with pre-approved personal loans of up to Dh250,000 (US$68,000) and credit cards with no annual fees, last week.

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