Real Estate Financing in the UAE: About Credit Opportunities

12:33 am  |  24.01.2024

Real estate in the UAE, particularly in Dubai, attracts the attention of many, but not everyone can afford to invest a large sum right away. Like other developed countries, the UAE is actively developing a lending system that provides various options for those who want to become property owners.

Types of Financing When Purchasing Real Estate:

Fixed Rate Mortgage. In this financing scheme, a fixed interest rate ensures that the borrower always knows the exact amount of fixed monthly payments that must be paid to the bank regularly. This rate remains unchanged for a certain period, predetermined in advance, regardless of possible changes in interest rates.

This type of lending provides interest rate stability, which makes it easier to plan payments and create long-term financial strategies for the borrower.

Real Estate Financing Plan with Variable Interest Rate. Monthly payments may vary depending on the current interest rate associated with the Emirates EIBOR index. This index may fluctuate up or down on each payment date to reflect specific changes in interest rates. “EIBOR” represents the average interest rate between UAE banks.

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It should be noted that this financing scheme carries certain risks. As interest rates increase, the monthly payment amount will also increase since it is impossible to predict future changes in this index.


Murabaha is one of the most well-known forms of Islamic real estate finance and fully complies with Islamic Shariah. An Islamic bank or finance company sells the property directly to the buyer, which transfers ownership into the buyer’s name. However, the property remains mortgaged until the agreed loan amount is paid in full.

It is important to note that in case of non-payment of payments to a finance company or Islamic bank in Dubai, certain measures are taken against the buyer, including selling the property at auction or restoring ownership.

Ijarah Muntahia Bittamleek

Muntahia Bittamleek is another system that meets the requirements of Islamic real estate finance. In this case, the installment sale process is similar to the previous one but differs in that two independent agreements are concluded simultaneously: the first is an initial lease agreement that applies during the lease term. The second document confirms the ownership transaction at the end of the payment period. Below is an example illustrating this principle:

When you do not have the required amount to purchase a home, the bank purchases it by adding its profit to the cost. The property owner then becomes a tenant of the bank, and the amount is paid in installments over a set period until the entire loan amount is paid in full.

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Requirements for the Applicant:

Each point directly depends on the bank you plan to contact.

For Individuals:

  • A completed application form.
  • Confirmation of object reservation (if available).
  • Down Payment Disclosure.
  • A copy of a valid resident visa (Emirates ID) and a copy of your passport.
  • Bank account statement for the last 6 months.
  • Salary certificate in the name of the bank, issued within 30 days or less from the date of application for the loan.
  • Certificate of salary transfer (if the salary is transferred to the bank).
  • Detailed information about current loans and liabilities.

For Companies:

  • A completed application form.
  • Confirmation of object reservation (if available).
  • Down Payment Disclosure.
  • A copy of a valid resident visa (Emirates ID) and a copy of your passport.
  • Bank account statement for the last 6 months.
  • A copy of the auditor’s report for the last two years (for loans whose amounts exceed certain limits).
  • A valid copy of your business license (if applicable, articles of incorporation, articles of association, or stock ownership certificates).
  • Information about current loans/liabilities.
  • Documents of the co-borrower (if available).
  • The borrower’s current passport with visa page.
  • Proof of income.

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Advantages of Real Estate in Dubai

Dubai has always been a place where innovative ideas and innovation are welcomed. This allows the city to stay ahead and become a hub for expats to live and work. The opportunity to earn passive income from real estate in Dubai or pay for your own home brings many advantages:

  • Tax exemption.
  • Access to high-quality health care.
  • Complete confidentiality of financial transactions.
  • Liquid asset at any time.
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