🧠 Dubai Mortgage Lingo 101 – Explained Like You’re 12

 

(Because buying a home shouldn't feel like decoding legal Latin)

Let’s be real applying for a mortgage in Dubai can feel like sitting through a class where everyone speaks fluent finance... except you.

LTV? DLD? EIBOR?
Why does everything sound like a robot name or a secret code?

Whether you're a first-time buyer or an expat trying to make sense of the property world, we’re here to simplify the jargon and break it all down - like you’re 12. (No offence we just like keeping things simple.)

So let’s get into it.           

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🏠 1. Mortgage

Let’s start basic.

A mortgage is just a big loan from the bank to help you buy a home.
You pay it back monthly kind of like paying rent, except you’re slowly buying the home instead of borrowing it.

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💵 2. Down Payment

This is the money you need to pay upfront.

In Dubai, if you’re an expat, you’ll need to pay at least 20% of the property’s price yourself.
The bank covers the rest as long as you promise to pay them back in easy monthly instalments. (With interest, of course.)

💡 Think of it like buying a phone: you pay some cash now, and the rest over time.

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📊 3. LTV (Loan-to-Value Ratio)

This scary-sounding acronym is just a fancy way to say:

How much money is the bank giving you compared to the value of the property?

So, if the property costs AED 1 million, and the bank gives you AED 800,000 —
That’s an 80% LTV.

Banks in Dubai usually cap LTV at:

• 80% for expats (first property)
• 85% for UAE nationals

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🏦 4. EIBOR (Emirates Interbank Offered Rate)

This is the UAE’s version of a base interest rate  like the “weather” for your loan.

When you get a variable rate mortgage, your rate might go up or down depending on how the EIBOR changes.

💡 If EIBOR goes up, your monthly payment might go up. If it goes down, you might pay less. Think of it like a mood swing for your mortgage rate.

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📃 5. Fixed vs. Variable Rate

• Fixed Rate: Same interest, same monthly payment. Easy, predictable.
• Variable Rate: The rate can change, usually after a few years. Risky, but sometimes cheaper at first.

🔁 Some banks offer a combo: Fixed for 3 years, then variable after that.

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📉 6. DLD Fee (Dubai Land Department Fee)

You’ll pay 4% of the property price to the Dubai government as a registration fee.

💡 Kind of like paying taxes on your new purchase but in one go.

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🧾 7. Valuation Fee

The bank wants to be sure the house is worth what you're paying so they hire a property valuer to check it out.

This usually costs around AED 2,500 to AED 3,000.
Yes, you pay this. No, it's not refundable.

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📂 8. Pre-Approval

This is the bank’s way of saying,

“If your documents check out, and you don’t go buy a Ferrari tomorrow, we’ll probably give you a loan.”

It's not a guarantee but it shows sellers and agents you're serious.
✅ Highly recommended before you go house-hunting.

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🔒 9. Early Settlement Fee

Say you get a big bonus, and you want to pay off your mortgage early. Nice!

But the bank doesn’t love that they expected interest from you over 25 years.
So they may charge a penalty (usually 1% of the outstanding loan).

💡 Ask about this before you sign anything!

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🧮 10. Mortgage Calculator

This is your new best friend.
Plug in your salary, property price, down payment, and it tells you how much you can afford and what your monthly payments might look like.

📌 We have one on our site it’s free, fast, and way easier than math class.

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🏁 Final Thoughts

Mortgages sound complicated, but when you break them down they’re just structured payments with a few fancy labels.
Now that you speak the lingo, you’re way ahead of the game.

And if you ever get confused again?

Just talk to someone who gets it like us.

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👋 Need Help Translating Mortgage Speak Into Real-Life Decisions?

📍 Visit our mortgage office in Dubai
💬 Book a free chat with a friendly mortgage consultant in Dubai
🧠 Use our property loan calculator Dubai no calculator brain required

We’ll help you go from “Huh?” to homeowner. 😄