How to use the calculator
- Choose whether you are an expatriate or a UAE national, and the kind of property: a first home to live in, a second home or investment, or an off-plan property.
- Enter your gross monthly income and what you already repay each month on loans and cards.
- Enter the savings you can put down. The down payment has to come from your own money, and purchase fees come on top of it.
- Enter the interest rate you assume, the stress test add-on and the term. The calculator does not fill in a market rate.
The three limits
A lender can only lend the smallest of three amounts. The calculator works out each one and highlights the one that sets your limit.
Loan-to-value
The loan-to-value (LTV) cap is the most a lender can lend as a share of the property's value. It depends on who is buying and what:
| Buyer | First home, lower band | First home, over AED 5 million | Second home or investment | Off-plan |
|---|---|---|---|---|
| UAE nationals | 85% (up to AED 5 million) | 75% | 65% | 50% |
| Expatriates | 80% (under AED 5 million) | 70% | 60% | 50% |
For a first home the cap depends on the price, and the price depends on the loan, so the calculator checks both sides of AED 5 million. If your savings would reach past AED 5 million at the higher cap but not cover the larger down payment above it, the estimate stops at AED 5 million and says so. Each borrower can use the first-home caps for one property only. The down payment must come from your own resources, not from a personal loan or a credit card.
Debt burden ratio with the stress test
Your monthly repayments on all loans and cards, including the new mortgage, must stay within 50% of your gross income. For a mortgage the lender tests this at a higher rate than your quote, so the loan still fits if rates rise. The calculator uses the add-on you choose and works out the largest loan the remaining room repays over your term.
Stress test on the rate
+2 to 4 points
When working out the debt burden ratio, mortgage lenders must stress-test the loan at 2 to 4 percentage points above its current interest rate; with an introductory rate, the test uses the rate that applies after it ends.
- Applies to
- All mortgage loan providers
- Source
- CBUAE Regulations Regarding Mortgage Loans (Circular 31/2013, as amended), Article (3) Important Ratios, Central Bank of the UAE
- Checked
Income multiple
On top of the debt burden ratio, the mortgage amount is capped at a multiple of your annual income.
Expatriates: largest mortgage
7× annual income
On top of the 50% DBR cap, the maximum mortgage amount for an expatriate is 7 times annual income.
- Applies to
- Expatriates, mortgage loans
- Source
- CBUAE Regulations Regarding Mortgage Loans (Circular 31/2013, as amended), Article (3) Important Ratios, Central Bank of the UAE
- Checked
UAE nationals: largest mortgage
8× annual income
On top of the 50% DBR cap, the maximum mortgage amount for a UAE national is 8 times annual income.
- Applies to
- UAE nationals, mortgage loans
- Source
- CBUAE Regulations Regarding Mortgage Loans (Circular 31/2013, as amended), Article (3) Important Ratios, Central Bank of the UAE
- Checked
The term matters too: a longer term lowers the instalment and raises the debt burden limit, up to the Central Bank maximum.
Longest mortgage term
25 years
The maximum tenor of a mortgage loan is 25 years.
- Applies to
- All mortgage loan providers (banks, finance companies, other financial institutions)
- Source
- CBUAE Regulations Regarding Mortgage Loans (Circular 31/2013, as amended), Article (3) Important Ratios, Central Bank of the UAE
- Checked
Worked example
Worked example
Expatriate, first home, income AED 25,000 a month, savings AED 400,000
The income, savings and the 4.5% rate are illustrations, not market figures. No existing debts; 25-year term; stress add-on 2 points.
- Debt burden ratio: 50% of 25,000 = AED 12,500 a month. At 6.50% over 25 years that repays about AED 1,851,284.
- Income multiple: 25,000 × 12 × 7 = AED 2,100,000.
- Deposit: at the 80% cap, AED 400,000 is the 20% down payment on a price of up to AED 2,000,000, so the loan is at most AED 1,600,000.
- The smallest of the three is the deposit limit. The instalment on AED 1,600,000 at 4.5% over 25 years is about AED 8,893 a month.
This buyer could borrow up to about AED 1,600,000 for a home of up to AED 2,000,000; the deposit is the binding limit.
With more savings, the same buyer would reach the debt burden ratio limit next. Try it in the calculator: raise the savings and watch the highlighted limit change.
What the result leaves out
- Bank policy. Lenders set their own rules on age, employer and minimum income. The Central Bank does not set a fixed maximum age at the last repayment; each lender does. The 50% cap is a maximum, and lenders are told not to apply it automatically, so an offer can be lower.
- Purchase fees. The calculator shows two Dubai Land Department fees on the result. Fixed fees, service partner fees and fees in other emirates come on top; see DLD and mortgage registration fees.
- Insurance and bank fees. Neither is included.
- Housing programmes. Home loans for UAE nationals under a local government housing programme that are covered by a guarantee can go to a 60% debt burden ratio. The calculator uses the standard 50%.
Note
Rules for expatriates are covered in mortgage limits for expats, and Islamic home finance in Islamic home finance compared. To check your existing repayments first, use the debt burden ratio calculator.