How much you can actually borrow in Dubai

The Central Bank caps, the ratio that decides it, and why non-residents are quoted half

Two separate rules decide what a Dubai lender will advance you. Most people learn about one of them and are surprised by the other at the worst moment.

Rule one, the loan-to-value cap

For a first property, UAE Central Bank regulations cap the loan at a share of the property value that depends on your residency.

• UAE nationals: 85%
• UAE residents: 80%
• Non-residents: 50%

The non-resident figure is the one that catches people. If you live abroad and you are looking at a AED 2,000,000 property, the regulation contemplates a loan of AED 1,000,000. The remaining million is cash, and the statutory transfer fees sit on top of that.

Second and subsequent properties are capped lower. We do not publish those numbers here because we do not ask how many properties you own, and quoting the first-property cap to someone buying their third would overstate what they can borrow.

Rule two, the debt burden ratio

Your total monthly debt repayments, including this mortgage, any other mortgage, car finance, credit cards and personal loans, may not exceed 50% of your gross monthly income.

This rule does not care about the property. It cares about you. A buyer who clears the LTV cap comfortably can still be refused on the debt burden ratio, and that is usually what has happened when a pre-approval comes back smaller than expected.

The two rules bind independently. You get the lower of the two answers, never the more generous one.

The two things that shrink the number further

Term. Twenty-five years is the common maximum among UAE lenders, and it is subject to your age at maturity. A shorter term means a higher monthly payment, which feeds straight back into the debt burden ratio.

Stress testing. Lenders assess affordability above the headline rate, not at it. The standard practice is to test at EIBOR plus a margin rather than the advertised rate. The rate you are quoted is not the rate your application is measured against.

What to do with this

• Work out your debt burden ratio before you look at property. It is arithmetic you can do today.
• Establish which of the two rules binds for you. For most non-residents it is the LTV cap; for most residents it is the debt burden ratio.
• Get a pre-approval in writing before you place a deposit, not after.
• Treat any rate quoted in marketing as indicative until a lender has put it in writing against your file.

Source: UAE Central Bank mortgage regulations, held in the codebase with their provenance so each figure can be traced to the rule rather than to memory. The 25-year term and the stress-test practice are common lender standards rather than regulation, and are labelled as such. Confirm current terms with a licensed mortgage broker before relying on any of it.