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This product is called an Offset Mortgage a very popular mortgage product in the west, however now on offer in UAE through us. This is how it works:

  • The bank, which gives you the mortgage, opens a current account in your name as well.
  • Whatever balances you keep in your current account offsets the interest on your mortgage in the same proportion.
  • For example, if you take a mortgage for AED 1 Million and keep AED 1 Million in your current account as average balance, you pay 0% interest on your mortgage.
  • You don’t have to keep any minimum or maximum balance in your current account. Whatever average balance you maintain in your current account, offsets the interest payment of your mortgage.
  • Another example: if you take a mortgage for AED 1 Million and keep  AED 500,000 as an average balance in your account, you pay only half interest on your mortgage. The table on the right illustrates the same.

For a loan amount of 1,000,000 your interest savings on your mortgage over 1 year.

Product features of offset mortgage:

  • Pay off your Loan much sooner
  • Every deposit you make in your current account lowers your interest payments on your mortgage reducing.
  • Easy access to your funds in your current account– Use your current account as any normal current account with no balance requirements.
  • You can withdraw your available balance at any time, just like any current account
  • Interest is calculated on your daily balances, reducing the effective rate of interest
  • Its better to place your funds in the current account, which will yield the same rate as that on the mortgage.
  • Your Current account will offer all facilities of a Current Account i.e. Debit Card, Cheque book, Internet and Mobile banking.
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