How we research and calculate

Which sources count

For each rule we go to the body that sets it, in this order:

1. Law and regulation: federal laws and decree-laws, and Central Bank of the UAE regulations as published in its Rulebook.
2. Regulator notices and standards: the Central Bank's consumer protection standards, notices and clarifications.
3. Official service pages: the Etihad Credit Bureau, the UAE Government portal, Sanadak, the Dubai Land Department and the courts.
4. A bank's own page, with the date we read it, and only for something that bank alone sets.

Where two official pages disagree, we use the more recent or more specific one, note the difference in the register and keep the question open until it is settled. News and comparison sites are never the source of a figure.

The facts register

The register is a single file that holds every UAE-specific figure on the site. Each entry records:

• the rule, stated as the source states it;
• the figure itself, such as a percentage, an amount in AED or a number of days;
• who or what it applies to;
• the source's title, publisher and web address;
• the date we last opened the source;
• notes, such as the article number or a recent change.

Guides show the key figures in fact boxes built from the register. This is the entry for the debt burden ratio cap:

Maximum debt burden ratio

50%

Monthly deductions for all loans and facilities from banks and finance companies together, including car loans, home loans, overdrafts and credit cards, must not exceed 50% of the borrower's gross salary and any regular income from a defined and specific source, at any time.

If a figure cannot be confirmed on an official page, it stays out of the register and off the site.

How our calculators work

The calculators use the same register for every limit they apply, and show the formula and the assumptions on each page. They work in AED, use equal monthly periods wherever time matters, and leave out fees, insurance and each lender's own criteria.

Loan payments

For a reducing-balance loan, the monthly instalment is P × i ÷ (1 − (1 + i)⁻ⁿ), where P is the amount borrowed, i is the annual rate divided by 12 and n is the number of months. For a flat-rate loan, interest is the amount borrowed × the flat rate × the term in years, and the instalment is the amount plus that interest, divided by the number of months. The loan payment calculator shows both.

Under the Central Bank's rules, interest on personal and car loans is calculated on the reducing balance with a 365-day year, so a lender's schedule can differ slightly from our equal monthly periods.

Flat to reducing conversion

The flat to reducing rate converter finds the reducing rate that gives exactly the same monthly instalment as the flat rate over the same term. There is no simple formula for this, so it is solved numerically. The common shortcut, flat rate × 2n ÷ (n + 1), overstates the exact answer, and we show it only for comparison.

Debt burden ratio

The debt burden ratio calculator divides your monthly repayments by your gross monthly income and compares the result with the Central Bank cap of 50%. You choose how much of your credit card limits to count as a monthly payment, because each bank sets its own policy; the Etihad Credit Bureau's own income measure counts 5% of card limits.

Mortgage affordability

The mortgage affordability calculator applies three Central Bank limits together and uses the lowest:

• the loan-to-value cap for your type of buyer and property, given your savings for the down payment;
• the debt burden ratio cap, with the repayment tested at your rate plus a stress add-on of 2 to 4 percentage points;
• the maximum multiple of annual income for your type of buyer.

The price it shows is that loan plus your savings. Purchase costs, such as Dubai Land Department fees, come on top.

Home purchase cost

The home purchase cost calculator adds up the cash needed to buy a home in Dubai with a mortgage: the down payment, the buyer's share of the Dubai Land Department transfer fee on the price, the mortgage registration fee on the loan, the trustee centre fees with VAT, and any other costs you enter, such as agency, valuation and bank fees. It uses the same fee lines as the mortgage affordability calculator, so the two show the same figures, and it checks the down payment against the loan-to-value cap. It covers Dubai only.

Credit card payoff

The credit card payoff calculator follows a card balance month by month with no new spending, using the monthly rate and the minimum payment rule from your own statement or Key Facts Statement, because both are each bank's own policy. It compares paying only the minimum with paying a fixed amount every month, and says so when a payment does not cover the interest added each month, because the balance would then never fall.

Early settlement

The early settlement calculator works from the balance still owed, the reducing rate and the instalments left. It applies the Central Bank's fee cap for the type of loan, adds VAT on the fee and compares the interest you would pay by keeping the loan with the interest after a full or part settlement. The fee table does not say what the personal loan cap is applied to, so the calculator uses the outstanding balance, as the table's home loan rows do.

Car loan

The car loan calculator takes the value the lender accepts for the car, your down payment, the rate and the term, and works out the instalment and total cost at a flat or reducing rate with the loan payment formulas above. It checks the loan against the Central Bank's maximum loan-to-value and term for car loans and, if you enter your income and other repayments, against the debt burden ratio cap.

Worked examples

Amounts, salaries and interest rates in our worked examples are illustrations chosen to make the arithmetic easy to follow. They are not market rates or offers, and each example says so.

Reviews and updates

A guide's "reviewed" date is the last time the whole guide was checked against its sources. We check a guide again when one of its sources changes, when a reader reports a possible error, or when we update the guide. Changes to a fact or figure are noted on the corrections page.

What we do not cover

• Live interest rates or product prices from banks.
• Rankings of banks, cards or loans.
• Recommendations for your personal situation.

Our editorial policy covers our standards and how a guide is made.