Subscribe Us

How does a mortgage loan work in Dubai?


How does a mortgage loan work in Dubai?


If you're moving to Dubai and want to get a mortgage, it's important that you understand how it works. We'll discuss the different types of mortgages available, as well as the interest rates that are charged on each type.

How does a mortgage loan work in Dubai?

A mortgage loan is a long-term financial tool used by people to purchase property. It is secured by the purchased property and the borrower pays back the loan with interest on the  principal over time.

A mortgage loan has a fixed interest rate and term (the period of time you must repay your debt), which means that it will not change once you've decided what amount of money you want to borrow from your lender. The amount of money borrowed will always be based on how much equity (or value) in your home.—that's why these loans are called “equity loans” rather than “fixed-rate mortgages” or “fixed-term mortgages."

Mortgage interest rates

The interest rate on a mortgage is a function of the bond market. The bond market is a market in which investors buy and sell government and corporate bonds, which are debt securities issued by governments, corporations, or other institutions. Bond investors use these securities to finance their own projects or invest in other companies that need financing.

The mortgage interest rates are determined by demand for loans in general and how much money is available on the open market at any given time.

Fixed-rate mortgage loans

Fixed-rate mortgages are usually more expensive than variable-rate mortgages. The difference between these two types of loans is that fixed-rate loans are repaid at a fixed interest rate, while variable-rate loans allow you to pay off your principal balance over time at a lower cost.

Fixed-rate mortgages are usually for shorter periods of time, e.g., 3, 5, or 10 years! They're also great if you think interest rates will rise in the future because then you can lock in an attractive rate and then adjust it later when necessary (or even cancel it altogether).

Variable rate mortgages

A variable rate mortgage is based on an index. The index is usually determined by an organization called mortgage brokers and lenders. This organization is known as credit union. The organization determines what the index will be for the next 12 months or so (it can be longer), which then becomes your loan's base interest rate for that period of time.

The index used to calculate this base interest rate varies from one state to another, but in most cases, it is based on something called Mortgage Rate Data (Mortgage Rate Data). This data comes from businesses such as banks and credit unions who collect information about how much people pay for their mortgages every month—and then they use this information to determine what their own customers' costs should be when they buy loans themselves!

Balloon mortgages

Balloon mortgages are loans with a fixed rate for a certain period of time, followed by a variable rate. The 'balloon' is the final payment, which is usually higher than the previous payments.

  • A mortgage loan can be lengthened so that you don't have to pay off all your cash upfront when you take out the home loan. This means that instead of paying off all your money at once, your monthly payments will be spread out over a longer period of time (approximately five years). This gives you more time to save up enough money for other expenses such as buying furniture or paying off an existing mortgage on another property before moving into this new one!

Amortization schedule for a mortgage?

The amortization schedule is a visual representation of how much you'll pay in principal and interest over the life of your loan. The less expensive your home purchase is, the longer it will take to pay off your mortgage.

A good rule of thumb is that if you buy a home for $150,000 (or even $100,000), then there's no reason why you shouldn't be able to pay off about 80% of what's owed before moving out or refinancing into another home with better terms.


You can learn more about the different types of mortgages in Dubai, and how to apply for one if you want one. You’ll also find all the information you need to know about fixed-rate mortgages, which are by far the most common type of mortgage there as well as variable-rate mortgages and balloon loans. We hope this article has given you some useful tips on getting started with your plans!