What are the main fees involved in getting a mortgage in the UAE?

The main costs include bank processing fees (typically 1% of the loan amount), property valuation charges, DLD (Dubai Land Department) transfer fees, mortgage registration fees, and early settlement penalties. You may also encounter broker commissions or admin charges depending on the lender. Always request a detailed cost sheet before signing your offer letter.

Are there any hidden charges I should be aware of when applying for a mortgage in Dubai?

Yes, many borrowers overlook smaller recurring costs such as property insurance, life insurance linked to the mortgage, and annual maintenance charges. Some banks also charge additional fees for partial settlement, refinancing, or loan restructuring. A transparent mortgage advisor like Ricadi Mortgages ensures that every cost is disclosed upfront before you commit.

How much should I budget for upfront costs when buying a property with a mortgage in the UAE?

On average, expect to spend 7–8% of the property value as upfront costs, covering down payment, DLD fees, mortgage processing, valuation, and insurance. For example, on a AED 1 million property, expect around AED 70,000–80,000 in total initial expenses. This percentage varies slightly between banks and emirates.

Can I negotiate or reduce my mortgage fees in the UAE?

Yes, negotiation is possible. Mortgage advisors like Ricadi Mortgages often help clients secure partial fee waivers, reduced processing charges, or even better rates through relationship banking. Always compare multiple lenders before committing — UAE banks have competitive mortgage products that can be optimized for your profile.

Does refinancing a mortgage in the UAE involve new fees?

Yes, refinancing (or mortgage buy-out) usually incurs new processing and valuation fees, though it can still save significant money long-term if you secure a lower rate. The key is to compare total switching costs versus potential interest savings. Expert guidance ensures you only refinance when the financial gain outweighs the expenses.

What are the main mortgage fees in the UAE?

The main mortgage fees in the UAE include valuation fees (around AED 2,500–3,000), processing fees (up to 1% of the loan amount), DLD transfer and mortgage registration fees, early settlement charges, and life insurance premiums.

Are there hidden charges when taking a mortgage in the UAE?

Yes, there can be additional charges like property insurance, partial settlement fees, or mortgage buy-out costs. Working with an expert mortgage broker like Ricadi Mortgages ensures full transparency and the best available rates.

Can mortgage fees in the UAE be negotiated?

In many cases, yes. Some banks offer promotional waivers or reductions on valuation and processing fees, especially for high-value properties or clients refinancing through mortgage consultants.

How much should I budget for mortgage-related fees in total?

Homebuyers in the UAE should typically budget around 4–5% of the property value for total mortgage and transfer-related fees, including bank, DLD, and insurance costs.

Who pays the valuation and processing fees in a UAE mortgage?

The buyer or borrower usually pays the valuation and processing fees directly to the bank. These are upfront costs required before loan approval and property transfer.

Real Cost of the Mortgage in UAE - Ricadi Mortgages

Mortgage fees in UAE

The Real Cost of Getting a Mortgage in UAE: Fees, Expenses, and Hidden Charges Explained

October 22, 2025 - By Frederick Mondol

Buying a home in the UAE remains one of the most empowering financial decisions for residents and investors alike. But what often surprises even seasoned buyers is that the “mortgage rate” alone doesn’t define the true cost of homeownership. Beneath the surface lies a complex structure of fees, expenses, and bank-linked charges that, if misunderstood, can quietly inflate your total borrowing cost tens of thousands of dirhams.

At Ricadi Mortgages, we believe that clarity creates confidence. In this comprehensive guide, we break down every component that contributes to the real cost of a mortgage in the UAE — updated for 2025 — so you can make informed, strategic decisions that secure your future, not strain it.

Understanding Mortgage Rates in 2025

The UAE mortgage market has evolved remarkably since the highs of 2023. With the U.S. Federal Reserve expected to cut rates 25 basis points this quarter, the UAE’s EIBOR (Emirates Interbank Offered Rate) — which influences most variable-rate products — is already adjusting downward.

As of October 2025, here’s where mortgage rates stand:

2-Year Fixed: around 3.75–3.99%
3-Year Fixed: approximately 3.99–4.19%
5-Year Fixed: between 4.19–4.5%
Variable Rates: typically EIBOR + 1.5% to 2%, depending on profile and loan size

In contrast to last year’s tighter monetary cycle, this marks a welcome shift — particularly for end-users and investors seeking refinancing opportunities. Homeowners previously locked into higher fixed-rate loans (above 5%) now stand to benefit significantly through mortgage buy-outs or rate revision structures that Ricadi Mortgages helps negotiate seamlessly.

Breaking Down the Real Costs

Every mortgage in the UAE carries a network of upfront and recurring costs that shape the true financial picture. While some are regulatory, others depend on lender policies or property type. Let’s break them down clearly:

Bank Processing Fee: Usually 0.5% to 1% of the loan amount, charged upfront.
Valuation Fee: Banks charge around AED 2,500 to AED 3,500 to determine property market value.
Mortgage Registration Fee (Dubai Land Department): 0.25% of the loan amount + AED 290.
Trustee Office Fee: Typically AED 4,200–5,000.
Life Insurance Premium: Either one-time or annual, depending on lender — generally between 0.3–0.5% of the loan value annually.
Property Insurance: Around 0.02%–0.05% per year.
Early Settlement / Exit Fee: 1% of the outstanding balance (capped at AED 10,000) per Central Bank regulations.

These figures may vary slightly depending on the bank and loan profile, but understanding them upfront ensures you’re not blindsided hidden costs post-approval.

The Hidden & Overlooked Costs

Beyond the official charges, certain less-obvious expenses can quietly elevate your overall mortgage cost:

Rate Adjustment Costs: Variable-rate mortgages linked to EIBOR fluctuate periodically — meaning even small changes can raise your EMI significantly.
Mandatory Cross-Selling: Some banks tie mortgage approvals to bundled products such as credit cards, insurance, or salary transfers.
Administrative or Handling Charges: Minor in appearance but cumulatively impactful, these can range from AED 500–1,000.

Ricadi Mortgages always encourages borrowers to demand a complete fee disclosure sheet before signing — an often-overlooked step that separates transparent financing from misleading offers.

How Rate Cuts Influence Mortgage Opportunities

When central banks ease rates, UAE’s EIBOR-linked mortgage ecosystem responds — often with a lag but always with impact. A 25 bps Fed rate cut translates into lower borrowing costs for local banks, which in turn trickles down to end-users.

For current borrowers, this environment opens a golden window to refinance. If you’re locked into a higher fixed or variable rate, you can transfer your existing mortgage to another bank offering better rates through a Mortgage Buy-Out. Ricadi Mortgages specializes in this exact process — from comparative analysis and valuation to settlement and title transfer — ensuring your transition is smooth and cost-efficient.

Even a 0.5% rate reduction on a AED 1.5 million mortgage can save over AED 45,000 in interest across the tenure. That’s why monitoring policy shifts and acting timely can redefine your long-term savings potential.

Realistic Case Scenarios

Case 1 – The Executive Locked in a 5.25% Fixed Rate

A senior finance professional in Dubai had taken a 5.25% fixed-rate mortgage in 2023. With rates now averaging around 4.1%, Ricadi Mortgages facilitated a buy-out, transferring the loan to a bank offering a 3.99% fixed rate for three years. The client saved over AED 280,000 in total interest and reduced their monthly installment AED 1,900 — all while maintaining the same tenure.

Case 2 – The Non-Resident Investor

An Indian investor holding an off-plan property in Business Bay faced higher EIBOR-linked payments due to rate volatility. Ricadi’s team restructured his financing with a hybrid fixed-rate product at 4.25%, ensuring predictable EMIs and stronger rental yield projections. The client’s annual ROI improved from 6.2% to 7.1% within the first year.

Case 3 – The Family Seeking Rate Stability

A young couple from Abu Dhabi had a variable mortgage that spiked following last year’s EIBOR surge. Ricadi guided them toward a five-year fixed plan at 4.3%, locking their EMI stability. The long-term predictability of payments allowed them to redirect savings into education and investment planning — a complete financial turnaround story.

How Ricadi Mortgages Simplifies Complexity

Every borrower’s journey is unique. Ricadi Mortgages’ value lies not only in securing lower rates but in structuring smarter loans that align with each client’s life stage, financial horizon, and risk appetite. The team handles:

Comparative analysis of leading UAE banks
Valuation, settlement, and title transfer
End-to-end documentation and compliance
Advisory on refinancing and rate optimization
Clear, transparent cost breakdowns — no surprises

Expert Insight: The Power of Timing

“Most people fixate on finding the lowest rate — but timing your mortgage move is what truly defines savings,” says a Senior Consultant at Ricadi Mortgages. “As the market softens, those who reassess early are the ones who gain the most.”

By staying updated with monetary shifts and leveraging Ricadi’s banking network, borrowers can confidently navigate the ever-evolving UAE mortgage ecosystem — without the uncertainty of hidden costs or inflated rates.

Final Thoughts

Getting a mortgage in the UAE isn’t just about comparing rates; it’s about understanding the entire financial equation. From upfront fees to EIBOR movements and hidden charges, the total cost defines your long-term financial comfort. With expert guidance from Ricadi Mortgages, you can ensure that every dirham you invest works efficiently — without unpleasant surprises down the road.

Ready to Review Your Mortgage Costs?

Ricadi Mortgages offers personalized consultations to evaluate your current rate, analyze buy-out opportunities, and minimize your total mortgage expense.
Schedule your free consultation today.