Financing off-plan property: mortgages vs developer payment plans

UAE banks can lend at most 50% of the value of a home bought off-plan, for nationals and expats alike. Central Bank rules make your own money go to the developer first; the bank’s money follows against checked construction milestones or, with some lenders, at handover. In Dubai, the law requires every payment to go into the project’s escrow account, which can be spent only on building that project.

Key takeaways

• Off-plan mortgages are capped at 50% of the property value for every buyer, so at least half the price comes from your own money.
• Where a loan is paid out in stages, the lender must use your own share first and then pay against construction milestones that are checked on site.
• In Dubai, buyers' payments go into a project escrow account that can be used only to build that project and that the developer's creditors cannot touch.
• In Dubai, the developer must register your sale in Dubai Land Department's provisional (Oqood) register within 90 days of signing.
• A developer payment plan is a schedule in your sale contract, not a bank loan, so check its terms as carefully as a mortgage offer.

Limits for finished homes are in mortgage limits for expats; Dubai’s fees are set out line by line in DLD and Oqood registration fees.

What off-plan means and how the sale is recorded

Buying off-plan means buying a home from a developer before it is built, and paying in stages until handover. In Dubai, the developer must register the project and open an escrow account before it sells, and each sale is then recorded in Dubai Land Department’s (DLD) provisional register, handled in its Oqood system.

Before a Dubai developer can sell off-plan

30% guarantee

Before selling off-plan, a Dubai developer registers the project with Dubai Land Department and opens an escrow account for it; registration requires land in a freehold or long-term lease area with a title deed, and a guarantee of 30% of construction, given by completing 30% of the works, a bank guarantee for 30% of construction or an equivalent cash deposit.

The developer must also be listed in DLD’s Register of Real Estate Developers and needs DLD’s written permission to advertise off-plan units (Law No. 8 of 2007, Articles 4 and 5).

Once you sign the sale and purchase agreement, the developer registers your purchase through DLD’s developer portal, and the provisional registration certificate is sent to you by email.

Registering your purchase in Oqood

Within 90 days; 2% + 2%

Dubai Land Department registers off-plan sales in its provisional (Oqood) register: the developer must register the signed sale and purchase contract within 90 days of signing, and the listed fees are 2% of the sale value for the seller and 2% for the purchaser, plus AED 10 knowledge and AED 10 innovation fees.

On an off-plan purchase the developer is the seller. DLD’s page does not say whether a sale contract can pass the seller’s share of the fee to the buyer, so read the cost clauses of your contract before you sign.

How much a bank lends on off-plan property

The Central Bank sets one cap for every off-plan buyer, whatever the price or purpose and whether you are a UAE national or an expat. Its reason is the long development period and the higher risk that the project is not completed.

Maximum loan-to-value, off-plan

50%

The maximum loan-to-value for a mortgage on a property bought off-plan is 50%, regardless of purpose, value or buyer type.

The rest must be your own money, not borrowed through a personal loan or a credit card:

Where your share must come from

Own funds

The down payment must come from the borrower's own resources, not from other borrowing such as personal loans or credit cards.

The cap is a ceiling. The lender still checks that all your monthly repayments fit within the debt burden limit, testing the mortgage at a rate above the loan’s current rate.

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.

Mortgage stress test

+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.

The cap does not depend on where you live; lenders’ own criteria for buyers abroad are in buying as a non-resident. The mortgage affordability calculator shows what your income supports.

When bank money starts

The lender pays nothing until your own share of the price has gone to the developer. After that, it pays in stages against construction milestones that are checked on site, or starts at handover, depending on the product.

Your share first, then milestones

Whose money is paid first

Buyer's money first

Where a mortgage lender finances a property under construction in stage payments, it must first use the owner's own share of the construction price to pay the developer or contractor, and only then release loan money, against completion milestones physically confirmed by the lender or by a qualified professional independent of the borrower and the developer.

With a 50% cap, at least half the price is normally paid from your own funds before any loan money moves. ADCB’s off-plan release of 30 April 2026 described pre-approval for up to 50% of the value on off-plan purchases from leading UAE developers, valid for up to 12 months and renewable each year until handover. Final approval and financing follow once 50% of the value is paid or at handover. On 13 October 2026, Dubai Islamic Bank’s home finance page listed off-plan finance of up to 50%.

Before relying on a pre-approval, read what it does and does not promise in mortgage pre-approval.

Registering the mortgage

In Dubai, a loan on an off-plan unit is registered as a provisional (Oqood) mortgage. If you have bank finance when you buy, DLD’s Oqood service lets the developer register the sale and the mortgage together.

Sale and mortgage registered together

Sale and mortgage registered together

When the buyer of an off-plan unit in Dubai has bank financing, the developer registers the provisional sale and the mortgage together through Dubai Land Department's Oqood portal; the buyer provides a bank letter with the value and date of the mortgage and the signed mortgage contracts, and the mortgage fee is 0.25% of the mortgage value on top of the sale fees.

Service partner fee, provisional mortgage

AED 5,000 + VAT

Dubai Land Department lists a service partner fee of AED 5,000 plus VAT to register a provisional (Oqood) mortgage.

If the mortgage is registered later, DLD’s general mortgage registration service lists the same rate:

Mortgage registration fee

0.25%

Dubai Land Department charges 0.25% of the mortgage value to register a mortgage.

Your loan documents must spell out how and when the money is paid out and which construction milestones trigger each payment:

What the loan documents must show

Full terms in the loan documents

Mortgage loan documentation must include the property or development details, the borrower's contribution, the loan amount, repayment period, instalment, interest or profit rate, insurance requirements, how and when the money is disbursed, the progress-payment milestones for property under construction and a clear prepayment policy; fees go in a separate schedule, the borrower must be told the total cost of the loan over its life, and signs every page and receives a copy signed by both sides.

Compare these terms with the Key Facts Statement you receive first, and read your rights as a borrower if something differs.

Payments during construction

What you pay the lender before handover depends on the product, so ask for the schedule in writing. The Mortgage Regulations allow interest-only repayment for investment loans only:

Interest-only period

Max 5 years

Interest-only (deferred principal) mortgages are allowed only for investment loans, and principal may not be deferred for more than 5 years from the first drawdown.

We did not find a Central Bank rule on what someone buying a home to live in pays between the first drawdown and handover. Islamic products can work differently: under Dubai Islamic Bank’s istisna and forward ijara product, the customer pays advance rentals before handover, which the bank holds in trust until delivery. More in Islamic home finance for off-plan homes.

Developer payment plans

A developer payment plan is an instalment schedule in your sale and purchase agreement with the developer, not a bank loan. The Central Bank’s mortgage rules are written for lenders:

Who the Mortgage Regulations cover

Banks, finance companies, other lenders

The Central Bank's mortgage regulations apply to banks, finance companies and other financial institutions that provide mortgage loans; they set minimum standards, and lenders may apply stricter limits than the regulations allow.

We found no Central Bank rule covering developer payment plans, during construction or after handover. Plans are not rule-free (in Dubai your payments still go into the escrow account), but their terms deserve the same scrutiny as a loan offer.

Plans during construction

A plan sets how much you pay at booking, during construction and at handover. If you plan to use a mortgage for the handover payment, ask the lender which loan-to-value limit it will apply. The off-plan products quoted above finance up to 50% of the value; on that basis, a plan that leaves 60% due at handover needs the other 10% from your own funds.

Post-handover plans

Some plans let you pay part of the price after you receive the keys. This is still a debt to the developer under the sale contract, not a mortgage. Ask whether any charge is added to the balance, what happens if you miss a payment, and how a lender would treat the balance if you later apply for a loan.

If you fall behind on a plan

What a missed payment costs is set by your contract and by Dubai law; this guide gives no figures for it. DLD’s FAQ says it cannot cancel a developer’s contract at the buyer’s request: a buyer who wants out must go to the real estate court, and DLD can only help the two sides settle.

If you and the developer agree to move you to another unit in the same developer’s projects, your registration fees can move with you:

Switching units with the same developer

Fees moved, charged on any increase

If a Dubai developer and an off-plan buyer agree to move the buyer to another unit in the same developer's projects, Dubai Land Department can transfer the registration fees already paid to the new unit, charging fees only on any increase in price.

This is a transfer, not a refund; the DLD pages we read describe no refund of registration fees on a cancelled purchase.

Mortgage vs payment plan: a side-by-side

The table does not say which route costs less: that depends on the plan’s terms and the loan’s rate and fees. The two can also be combined, paying the plan’s construction instalments from your own money and using a mortgage at handover, as in the worked example below.

How your payments are protected in Dubai

Dubai’s escrow law makes a developer who sells off-plan pay buyers’ money, and any money from their lenders, into an escrow account that can be used only to build that one project.

The project escrow account

Where off-plan payments go

Project escrow account

In Dubai, a developer selling units off-plan must pay buyers' payments, and any project finance, into an escrow account opened in the project's name with an escrow agent accredited by the Land Department; the account may be used only to build that project, and the developer's creditors cannot attach the money in it.

Money leaves the account in stages, after an engineer for the escrow agent has checked the work on site:

When escrow money is paid out

Paid out against milestones

Dubai Land Department says money leaves an off-plan project's escrow account only to pay the project's contractors, consultants and marketing, with marketing limited to 5% of total sales, and only after the escrow agent's engineer has visited the site and confirmed that the construction milestone set in the escrow agreement is complete.

Part of the money stays in the account after completion, as cover for defects:

Retention after completion

5% held for 1 year

The escrow agent must keep back 5% of the total value of an off-plan project's escrow account once the developer obtains the completion certificate, and releases it to the developer one year after the units are registered in the buyers' names.

If the project stalls or is cancelled

If the project is not completed

Completion or refund

If an off-plan project in Dubai is not completed, the escrow agent must, after consulting the Land Department, take measures to protect depositors so that the project is completed or their payments are refunded; Dubai Land Department says that when a project is cancelled it asks the developer to return buyers' payments within 60 days of the cancellation decision, and refers the matter to court if the developer does not.

If the project has not been cancelled and you want your money back, DLD’s FAQ points you to the court, not to DLD.

Checks before you pay

• Ask the developer for the project’s DLD registration certificate and the escrow account details, and pay only into that account.
• Keep every receipt. The escrow law lets buyers see their own account records and ask for copies (Article 12).
• Check the project’s progress: DLD’s FAQ says you can track it, by its latest approved technical audit, on DLD’s website under Real Estate Regulation.
• Make sure your sale is registered in Oqood within 90 days and that the certificate reaches you. If the developer refuses or delays, DLD’s FAQ says you can apply to register the contract through DLD’s Real Estate Registration Assurance section.

DLD’s public Project Status Enquiry, also in the Dubai REST app as Mashrooi, lets you search a project by name or number; a project’s details include an escrow account section with the bank’s name and the account. If the account you are asked to pay into does not match, ask the developer and DLD before you pay.

Worked example: an AED 2 million off-plan apartment

Worked example

Off-plan apartment in Dubai for AED 2,000,000, loan at handover

The price and the plan (10% at booking, 40% during construction, 50% at handover) are illustrations. We assume the sale is registered on its own when the contract is signed, the buyer pays the purchaser’s 2% and the mortgage is registered before completion.

1. Own money before any bank money: 10% + 40% = 50%, or AED 200,000 + AED 800,000 = AED 1,000,000, all paid into the project escrow account.
2. Bank loan at handover or once 50% is paid: up to AED 2,000,000 × 50% = AED 1,000,000.
3. Oqood sale registration: AED 2,000,000 × 2% = AED 40,000, plus AED 10 knowledge and AED 10 innovation fees = AED 40,020.
4. Mortgage registration: AED 1,000,000 × 0.25% = AED 2,500.
5. Provisional mortgage service partner fee: AED 5,000 + 5% VAT (AED 250) = AED 5,250.
6. Cash before the loan starts: AED 1,000,000 + AED 40,020 + AED 2,500 + AED 5,250 = AED 1,047,770.

This buyer needs about AED 1,047,770 of their own money before the bank lends anything, not counting agency, valuation and bank fees.

VAT on the service partner fee

5%

Value Added Tax was introduced across the UAE on 1 January 2018 at a standard rate of 5%.

If the sale and the mortgage are registered together from the start, DLD’s page for that service also lists an AED 250 title deed fee and an AED 250 map fee.

Other emirates

The 50% cap, the own-funds rule and the milestone rule come from the Central Bank and apply in every emirate. The escrow, Oqood and fee rules above are Dubai’s; Abu Dhabi and the other emirates have their own real estate laws and land registries, which this guide does not cover, so check with the land authority of the emirate where you buy. More on buying a home is in our Mortgage guides.