What to Know About Revert Rates

An important thing for you to know as a property investor is what to expect when your fixed rate
ends. Understanding this topic is important, so you can make sure your lender has offered you
the best deal possible. Depending on what your bank is willing to offer and what terms you
already have, you might be able to procure a better rate than you negotiated at the beginning of
your mortgage term.

Mortgages tend to have a contract length of 20 to 25 years, which means that is the expected
time it will take you to repay your loan. In reality, many home mortgages are as short as 10 or
even five years before properties are sold to another owner, loans are refinanced with a new
bank, or the owner renegotiates the mortgage terms. This is why it is only really necessary to
consider monthly payments as long as your loan is in a fixed period.

Mortgage loans are no different from any other kind of loan in that they require periodic review
to ensure they are mutually agreeable to both parties. The top priority for UAE banks is
maintaining their customer accounts. This is an important aspect of renegotiating your mortgage
because it means that you do have a certain degree of bargaining power with your lender.
Usually, banks prefer to renegotiate rates — even ones already agreed upon in your contract —
rather than lose a customer altogether. The bank will conduct a cost analysis, examining the exit
costs you would owe if you moved to another lender, the Dubai Land Department’s costs for de-
registering your mortgage and re-registering, and the costs to establish a new loan along with the
valuation fee.

About two months before the fixed rate expires is a smart time to look over your mortgage and
its progress, so you will have a clearer idea of what you can expect to pay after its expiration.
That’s why it’s always good to use a mortgage calculator to get full insight of your costs.
Changing your mortgage is a smart choice if it will be cost-effective and save you money in a
reasonable amount of time. Otherwise, you might not want to renegotiate the terms of your
mortgage after the fixed rate period ends. As with any important financial decision, it is wise to
talk with a mortgage advisor if you have any doubts. He or she can help you navigate the process
and weigh all your options.

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