New Mortgage Rules in Dubai

New Mortgage Rules in Dubai

New Mortgage Rules in Dubai: Buyers Now Responsible for DLD and Brokerage Fees

Changes to Mortgage Financing in Dubai: DLD and Brokerage Fees Excluded

As of February 1st, 2025, property buyers in Dubai can no longer finance the four per cent Dubai Land Department (DLD) fees and the two per cent brokerage fees through their mortgages. This change comes after the Central Bank of the UAE instructed banks to stop financing these fees.

Impact on Buyers

The DLD fee is a mandatory registration fee, calculated as four per cent of the property’s total price. For example, a Dhs 1,000,000 property would incur around Dhs 60,000 in DLD fees. Until now, buyers could finance this fee as part of their mortgage loan. Now, they must cover the DLD and brokerage fees with their own funds, increasing their upfront costs.

The two per cent brokerage fee will also no longer be eligible for mortgage financing. This change means that buyers must pay these fees out of pocket when buying a property.

Larger Down Payments

As a result of these changes, property buyers will need to make larger down payments. Buyers typically need 20 per cent for properties under Dhs 5,000,000 and 30 per cent for those above this price. Now, they will also need additional funds to cover the DLD and brokerage fees on top of the required down payment.

For first-time buyers, the Central Bank of the UAE limits mortgage loans to seven times their salary. This cap will remain in effect, but the higher upfront costs may make it more challenging for some buyers to secure financing.

Off-Plan Properties Gain Popularity

These changes are likely to make off-plan properties more attractive. Developers often offer flexible payment plans for off-plan properties, which may include lower down payment options. Some developers may also offer DLD fee waivers or partial fee payments, helping to reduce the initial financial burden for buyers.

With higher costs for completed properties, buyers may turn to off-plan developments for their more flexible payment options. This shift could increase demand for off-plan properties, which could be a significant trend in Dubai’s real estate market in the coming months.

In summary, while buyers will now need more funds upfront, the market may see a rise in off-plan property sales. Developers offering flexible payment plans and fee waivers could gain popularity as buyers look for more affordable options.

You may also like

Get Latest Udpates

your go-to destination for the latest updates and insights in the ever-evolving world of property and housing

Get Latest Udpates

your go-to destination for the latest updates and insights in the ever-evolving world of property and housing

Request for a Consultation

We respond within the same day. If you have a specific inquiry, please indicate in the message