How much can I borrow?

  • It depends on age, nationality, salary, type of employment etc.
  • Some banks say you can borrow 7 times your annually salary. (1)
  • Other banks say you can borrow 70 times your monthly salary. (2)
  • Many banks say your monthly salary needs to be at least 4 times your mortgage payment. (3)
  • Some banks uses their current interest rate as a base for calculating the mortgage.
  • Other banks will add 1% or 2% on current rates in case of future interest rate fluctuations.
  • The maximum loan term is 25 years according to UAE Central Bank regulations.
  • Are you under the age of 40 years you can have a maximum loan term up to 25 years.
  • Are you over the age of 40 years the maximum loan term is up to the age of 65 years.
  • Are you self-employed the maximum loan term is raised up to the age of 70 years.

 

Let’s say you want to borrow 1,000,000 AED for the maximum 25 year-period. How much do you need in monthly salary?

Example:

    • You are under the age of 40 years.
    • Have a steady job and fixed income.
    • You have no other loans.
    • You choose a fixed repayment rate during the 25 year mortgage loan period (fixed rate = the same sum every month).
    • The interest rate is 4%.
    • (1) Your monthly salary has to be 11,905 AED. 1,000,000 AED / 12 months / 7 = 11,905 AED.
    • (2) Your monthly salary has to be 14,286 AED. 1,000,000 AED / 70 months = 14,286 AED.
    • (3) Your monthly salary has to be 13,333 AED. 1,000,000 AED / 25 years / 12 months x 4 = 13,333 AED
  • In lowest case your monthly salary needs to be 11,905 AED to borrow 1,000,000 AED.
  • In highest case your salary has to be 14,286 AED to borrow 1,000,000 AED.

 

These factors will decide how much you can borrow:

  • Annual income
  • Nationality (local or expat)
  • Employment status
  • Type of employment (employed by a company or self-employed)
  • Salary type (fixed or bonus-based)
  • Age
  • Existing loans and debts
  • Personal circumstances
  • The property value
  • The current bank interest rates
  • Personal health
  • Smoker or non-smoker

It all depends on what the bank thinks you can afford to borrow and pay back.

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