A long-awaited mortgage lending regulation was issued by the UAE Central Bank on Monday. It allows the country’s banks to provide a loan of up to 80 percent of the property value to UAE nationals and 75 percent to expatriates.
The new set of rules which were released by the Central Bank will be enforced one month after it is published in the official gazette this week.
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A statement by the Central Bank stressed that the 23 national banks and 28 foreign units operating in the country must take into consideration the debtor’s eligibility and financial resources.
It also told banks to ensure they would not give loans that exceed 50 per cent of the client’s monthly income.
The new rules stipulated that mortgage loans to Emiratis must not exceed 80 per cent in case the property value is Dh5 million or less. The loan must be cut to a maximum 70 per cent in case the property value is above Dh5 million.
Loans to expatriate clients must not exceed 75 per cent of the property value of Dh5 million or less and 65 per cent if the property value is more than Dh5 million.
As for clients buying property off-plan, the maximum mortgage loan they can get is 50 percent of the property value.
The law set a maximum period of 25 years for a mortgage loan provided that the Emirati debtor must not exceed 70 years of age when repaying the last installment of the loan. As for expatriate clients, the law set the maximum age at 65 years.