Dubai’s real estate market continues to captivate investors worldwide with its innovative offerings and dynamic growth. At the forefront of this exciting landscape are off-plan properties – properties purchased before construction is completed. These investments have become increasingly popular, with off-plan sales accounting for over 60% of all property transactions in Dubai in recent years.
To facilitate these purchases, off-plan mortgages have become a crucial financial tool. But what makes them so attractive in Dubai? Let’s delve into the world of off-plan mortgages and explore why they’ve become a cornerstone of Dubai’s property market.
Types of Off-Plan Mortgages in Dubai

1. Fixed-Rate Mortgages
With fixed-rate mortgages, the interest rate remains constant throughout the loan term, typically ranging from 5 to 25 years.
Example: Sarah, an expat working in Dubai’s finance sector, opts for a 20-year fixed-rate mortgage at 3.99% for her off-plan apartment in Dubai Marina. Her monthly payments will remain the same for the entire loan term, allowing for easy budgeting.
Benefits:
- Predictable monthly payments
- Protection against interest rate increases
- Ideal for long-term investors who prefer stability
2. Variable-Rate Mortgages
Variable-rate mortgages have interest rates that fluctuate based on market conditions, often tied to the Emirates Interbank Offered Rate (EIBOR).
Example: Ahmed, a local investor, chooses a variable-rate mortgage for his off-plan townhouse in Dubai Hills Estate. His initial rate is 3.5%, but it may change every six months based on EIBOR fluctuations.
Benefits:
- Potential for lower initial interest rates
- Flexibility to benefit from falling interest rates
- Suitable for investors who anticipate decreasing rates or plan to sell in the short term
3. Interest-Only Mortgages
With interest-only mortgages, borrowers pay only the interest for a specified period before starting to pay off the principal.
Example: Maria, a business owner, opts for an interest-only mortgage for the first five years on her off-plan commercial property in Business Bay. This allows her to manage cash flow while her business grows.
Benefits:
- Lower initial monthly payments
- Ideal for short-term investors or those expecting a significant increase in income
- Allows for greater cash flow in the early years of the loan
4. Combination Mortgages
These mortgages blend elements of fixed and variable-rate mortgages.
Example: The Patel family chooses a combination mortgage for their off-plan villa in Arabian Ranches III. Their mortgage has a fixed rate for the first three years, then switches to a variable rate.
Benefits:
- Offers a balance between stability and flexibility
- Can provide lower initial rates with some protection against future rate increases
- Suitable for investors who want to hedge their bets on future market conditions
Benefits of Off-Plan Mortgages

- Lower initial costs: Off-plan properties are often priced 20-30% lower than completed properties.
- Flexible payment plans: Many developers offer 30/70 or 40/60 payment plans, with the bulk due on completion.
- Potential for high returns: Historical data shows that some off-plan properties in Dubai have appreciated by 20-40% by completion.
- Customization options: Buyers can often choose finishes and layouts during the construction phase.
- Extended time for financial planning: Phased payments allow buyers to better manage their finances.
How to Qualify for an Off-Plan Mortgage in Dubai
Eligibility Criteria
- Minimum age: 21 years old
- Minimum salary: Usually AED 15,000 per month (may vary by bank)
- Employment status: Stable employment with a minimum tenure of 6 months to 1 year
- Debt Burden Ratio (DBR): Should not exceed 50% of monthly income
- Visa status: Valid UAE residency visa (for expatriates)
Necessary Documentation
- Passport and UAE visa copy
- Emirates ID
- Salary certificate and bank statements (last 6 months)
- Property details and sale agreement
- Down payment proof
- Credit report
Tips for Improving Your Chances of Approval
- Maintain a good credit score
- Save for a larger down payment (aim for 25-30% if possible)
- Reduce existing debts
- Choose a reputable developer and project
- Consider getting pre-approved before property selection
Top Banks Offering Off-Plan Mortgages in Dubai
Emirates NBD
- Interest Rates: Starting from 4.99% (variable).
- Loan Term: Up to 25 years.
- Unique Feature: Offers a “Future-Value” mortgage product specifically designed for off-plan properties.
Abu Dhabi Commercial Bank (ADCB)
- Interest Rates: Starting from 3.75% (fixed for the first year).
- Loan Term: Up to 25 years.
- Unique Feature: Provides a dedicated relationship manager for mortgage clients, offering personalized service.
Dubai Islamic Bank
- Profit Rates: Starting from 3.99% (fixed for the first year).
- Finance Term: Up to 25 years.
- Unique Feature: Offers Sharia-compliant mortgage options, which is a key feature for those seeking Islamic financing.
Mashreq Bank
- Interest Rates: Starting from 4.99% (variable).
- Loan Term: Up to 25 years.
- Unique Feature: Known for its fast-track approval process for certain salary brackets, making it a convenient option for eligible customers.
HSBC
- Interest Rates: Starting from 5.10% (variable).
- Loan Term: Up to 25 years.
- Unique Feature: Offers global banking options tailored for international investors, which includes benefits like no early settlement charge after 3 years and discounts for eco-friendly properties.
Note: Rates and terms are subject to change and may vary based on individual circumstances. Always check with the banks for the most current offerings.
Steps to Secure an Off-Plan Mortgage
- Research and choose a reputable developer and project
- Get pre-approved for a mortgage
- Select your preferred property and sign a reservation agreement
- Pay the initial deposit (typically 10-20% of the property value)
- Submit mortgage application with required documents
- Undergo bank evaluation and property valuation
- Receive and review mortgage offer
- Sign mortgage and property purchase agreements
- Begin making payments according to the agreed schedule
Risks and Challenges

While off-plan mortgages offer exciting opportunities, they come with unique risks:
- Construction Delays: Projects may not be completed on time, affecting your investment timeline.
- Market Fluctuations: Property values may decrease during the construction period.
- Developer Reputation: Choose developers carefully, as their track record impacts project completion and quality.
- Oversupply Risks: Some areas in Dubai may face oversupply, affecting rental yields and property values.
- Legal Changes: UAE property laws can change, potentially impacting your investment.
Navigating the risks of off-plan mortgages can be challenging. Guardians Prime are here to answer your questions and provide personalized advice.
Mitigation Strategies:
- Thoroughly research the developer and project before investing
- Understand all contract terms, including force majeure clauses
- Consider taking out mortgage protection insurance
- Stay informed about market trends and regulatory changes
Legal Considerations
- Ensure the project is registered with the Dubai Land Department
- Understand your rights under Law No. (8) of 2007 concerning Real Estate Development Trust Accounts in Dubai
- Be aware of the Jointly Owned Property Law (Law No. 6 of 2019) which may affect your property management
Conclusion
Off-plan mortgages in Dubai offer a unique opportunity to invest in one of the world’s most dynamic real estate markets. While they come with risks, proper research, careful financial planning, and a clear understanding of the market can lead to significant rewards. As Dubai continues to grow and evolve, off-plan properties and their associated mortgages will likely remain a key feature of the emirate’s real estate landscape.
Remember, while this guide provides a comprehensive overview, it’s always advisable to consult with financial and legal professionals before making any significant investment decisions.
FAQs
- Can non-residents get off-plan mortgages in Dubai?
Yes, many banks offer mortgages to non-residents, but terms may differ from those for residents. - What happens if I lose my job during the mortgage term?
Most banks offer a payment holiday or restructuring options. It’s crucial to communicate with your lender immediately. - Are there any government charges for off-plan properties?
Yes, there’s a 4% Dubai Land Department fee, usually paid upon completion. - Can I sell my off-plan property before completion?
Yes, but there may be restrictions and fees involved. Check your contract and current regulations. - What is the typical loan-to-value (LTV) ratio for off-plan mortgages?
LTV ratios typically range from 50-75%, depending on the property value and your residency status.