Why UAE property owners should be in no rush to refinance mortgages

Why UAE property owners should be in no rush to refinance mortgages

Dubai: Mortgage lending rates in the UAE should drop at some point in 2024 – but that shouldn’t mean property owners with home loans to pay off should be in a rush to refinance.

Because if they get their calculations wrong, any such refinancing could come at a steep cost. So, who should aim for a refinance as and when interest rate cuts happen next year?

“We have seen many home buyers who had taken variable rates and as a result are paying as high as 8 per cent,” said Michael Hunter, CEO of the mortgage advisory portal Holo.

“(Any property owner) in this scenario would be advised to seek a better option. Staying on a variable rate - and waiting for rates to come down - may take a few years before it becomes viable again.”

Crunch time for end-users – and investors

Timing their refinancing move right could mean saving tens of thousands (or more) of what homeowners would be paying as mortgage.

For many home buyers in the UAE who bought during 2019-2021 on mortgages, they would have shifted from fixed rate terms to variable at some point during this year. UAE mortgage lenders typically offer 1-3