Mortgage Guide

Dubai mortgage types explained.

Fixed, variable, Islamic, or private bank? Each has different costs, risks, and benefits. Here's how to choose the right structure for your villa purchase.

Type	Rate Range	Max LTV	Best For
Fixed-Rate Mortgage Rate locked for 1–5 years. Predictable payments.	4.25% – 5.75% p.a.	Up to 80% (residents), 60% (non-residents)	Buyers who value payment certainty, especially those with fl...
Variable-Rate Mortgage Rate tracks EIBOR + margin. Lower initial rate.	3.95% – 5.25% p.a. (initial)	Up to 80% (residents), 60% (non-residents)	Buyers comfortable with rate risk, those planning to refinan...
Islamic Mortgage (Sharia-Compliant) No interest. Fixed profit margin. Sharia-compliant.	4.49% – 5.99% p.a. (profit rate)	Up to 80% (residents), 60% (non-residents)	Muslim buyers seeking Sharia compliance, and any buyer who p...
Private Bank / Lombard Facility Bespoke for UHNWIs. Asset-backed. Multi-currency.	3.50% – 4.50% p.a. (effective)	Up to 70% (case-by-case)	UHNWIs with AED 20M+ net worth, multi-currency income, compl...

Fixed-Rate Mortgage

Rate locked for 1–5 years. Predictable payments.

4.25% – 5.75% p.a.

Up to 80% (residents), 60% (non-residents)

Up to 25 years

Your interest rate stays locked for a set period — typically 1, 3, or 5 years. Monthly payments remain predictable, making budgeting easier. After the fixed period ends, the rate usually reverts to the bank's variable rate or EIBOR-linked rate.

Pros

Predictable monthly payments for budgeting
Protected from interest rate rises during fixed period
Easier to plan cash flow for HNWIs with complex income
No surprises during the initial years

Cons

Usually higher starting rate than variable options
Early repayment penalties during fixed period
If rates fall, you don't benefit until renewal
Refinancing costs apply if you switch early

Available from

Emirates NBDHSBCFABMashreqADIB

Variable-Rate Mortgage

Rate tracks EIBOR + margin. Lower initial rate.

3.95% – 5.25% p.a. (initial)

Up to 80% (residents), 60% (non-residents)

Up to 25 years

Interest rate fluctuates with the market, typically linked to EIBOR (Emirates Interbank Offered Rate) plus a bank margin. When EIBOR rises or falls, your monthly payment adjusts accordingly. Usually offers a lower initial rate than fixed options.

Pros

Lower starting rate than fixed-rate mortgages
Benefit when interest rates fall
Often more flexible early repayment terms
May have lower total cost over full term if rates stay low

Cons

Monthly payments can increase unexpectedly
Budgeting is harder for cash-flow planning
Rate spikes can strain finances
Less suitable for risk-averse buyers

Available from

Emirates NBDFABRAKBANKMashreq

Islamic Mortgage (Sharia-Compliant)

No interest. Fixed profit margin. Sharia-compliant.

4.49% – 5.99% p.a. (profit rate)

Up to 80% (residents), 60% (non-residents)

Up to 25 years

Structured as Murabaha (cost-plus financing) or Ijara (lease-to-own). The bank purchases the property and sells/leases it to you with a profit margin. No interest is charged — instead, a fixed profit rate applies. Fully compliant with Islamic law.

Pros

No interest (riba) — compliant with Islamic principles
Fixed profit rate provides payment certainty
Same LTV and term options as conventional
Available to Muslim and non-Muslim buyers alike

Cons

Rates can be slightly higher than conventional
Fewer product variations compared to conventional
Not all banks offer Islamic options
Structure can be complex to understand

Available from

Dubai Islamic Bank (DIB)ADIBAbu Dhabi Islamic BankEmirates Islamic

Private Bank / Lombard Facility

Bespoke for UHNWIs. Asset-backed. Multi-currency.

3.50% – 4.50% p.a. (effective)

Up to 70% (case-by-case)

Up to 20 years (flexible)

For ultra-high-net-worth individuals (AED 20M+ net worth). Private banks offer bespoke structures: Lombard lending (asset-backed), multi-currency facilities, blended resident/non-resident terms, and interest-only periods. Not advertised publicly.