CBUAE’s new measures will alleviate burden of rising rates on home loans for Emiratis

CBUAE’s new measures will alleviate burden of rising rates on home loans for Emiratis

The Central Bank of the UAE has announced measures to alleviate the burden of rising interest rates on residential mortgages for UAE nationals. The bank said the measures had come into effect as of 1st July and state that for customers with income higher than AED 40,000 per month, banks are permitted to deduct payments from salary or income up to a maximum of 60%, previously 50%, and that lenders themselves must bear the remaining costs related to interest rate increases. For customers with a monthly income of less than AED 40,000, banks are permitted to extend the repayment period tenor up to a maximum of 30 years, with customer payments capped at 50% of income, with banks bearing the remainder of charges resulting from increases in interest rates. The decision was taken following approval of the CBUAE board of directors and followed a study conducted by the central bank on the impact of rising interest rates on bank customers. (Writing by Imogen Lillywhite; editing by Daniel Luiz) [email protected]