Dubai mortgage holders squeezed by end of low fixed rates

Dubai mortgage holders squeezed by end of low fixed rates

Purchasing a home in Dubai for AED2 million ($544,600) in 2021 meant manageable monthly mortgage payments of about AED7,600, at a 2 percent interest rate secured for three years.  With these fixed-rate contracts now expiring, home owners have told AGBI that banks are rolling over to rates as high as 7 percent, resulting in monthly […]

Dubai mortgage rates doubling

Homeowners renegotiating loans

Banks are ‘flush with liquidity’

Purchasing a home in Dubai for AED2 million ($544,600) in 2021 meant manageable monthly mortgage payments of about AED7,600, at a 2 percent interest rate secured for three years. 

With these fixed-rate contracts now expiring, home owners have told AGBI that banks are rolling over to rates as high as 7 percent, resulting in monthly repayments rising by more than half to around AED12,000.

This hike in rates has driven homeowners to renegotiate with lenders.

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Despite the extra financial burden being placed on Dubai mortgage holders, experts remain optimistic about the market’s stability.

With rental returns averaging 6 to 7 percent and asset values appreciating in the double digits, Sawan Karia, a director at digital mortgage platform Huspy, said healthy yields help to cover any increase in the cost