Loan Against Property: Rates, Eligibility & How It Works

What is a loan against property in Dubai?

A loan against property allows a property owner to raise funds by using their residential or commercial property as collateral. In Dubai, this is always structured as a mortgage, regulated in the same way as home finance used to purchase property.

There are two recognised scenarios:

1. Mortgage on a mortgage-free property

If you own a property outright, with no existing mortgage, a bank may offer a new mortgage secured against that property.

• The property becomes collateral for the loan

• Standard mortgage rules apply, including valuation, income assessment and debt-to-income limits

• Ownership of the property remains with you, provided repayments are made on time

You must have a clear reason for taking out a loan against your property. Usually this is to:

• Purchase another property

• Finance property improvements or upgrades

2. Remortgaging with equity release

If your property already has a mortgage, accessing funds requires remortgaging to a new bank and increasing the loan amount to release built-up equity.

This is the same process outlined in remortgaging guidance and is not a separate loan structure.

How does a loan against property work?

Although the term “loan” is widely used, the process mirrors standard mortgage lending in Dubai.

Key points to understand:

• The property is mortgaged, but you remain the owner

• The loan amount is based on:

  • Current market valuation

  • Your income and liabilities

  • Bank affordability and risk assessment

• Failure to meet repayment obligations can ultimately lead to enforcement of the mortgage, following legal process

Loan-to-value limits

Maximum loan-to-value ratios are set by regulation and lender policy:

• Up to 80% of property value for UAE nationals

• Up to 75% of property value for expatriates

These are upper limits, not guarantees. Actual loan amounts may be lower depending on individual circumstances.

Loan against property eligibility

Meeting loan against property eligibility requirements is essential before applying. While criteria vary by bank, lenders typically assess the following:

• Stable and verifiable income

• Acceptable debt-to-income ratio

• Clean credit history

• Property located in Dubai and owned by the applicant

• Property type and condition suitable for mortgage security

Both salaried and self-employed applicants may be eligible, subject to documentation and affordability checks.

Required documents

Document requirements depend on your profile and whether the property is mortgage-free or already financed. Typical requirements include:

General documents

• Emirates ID for UAE nationals or residents

• Passport and visa copy for expatriates

• Property title deed

• Property valuation report

• Existing mortgage details, if applicable

Salaried applicants

• Salary certificates or payslips

• Bank statements

• Employment confirmation if recently employed

Self-employed applicants

• Trade licence

• Audited financial statements

• Business and personal bank statements

• Memorandum of Association, where applicable

Interest rates and loan terms

Interest rates for a loan against property in Dubai vary by bank and borrower profile. As a broad indication, rates typically fall within the 4.0% to 5.5% range, depending on:

• Whether the rate is fixed or variable

• Loan-to-value ratio

• Income stability and risk profile

Fixed-rate periods may be available initially, after which the mortgage usually reverts to a variable rate linked to the lender’s benchmark.

Loan tenures commonly extend up to 20 or 25 years, subject to age and bank policy.

Loan against property vs other financing options

Compared to personal loans or short-term credit, a loan against property offers:

• Access to larger loan amounts

• Longer repayment periods

• Lower interest rates due to property security

However, it also involves greater commitment and risk, as the property is used as collateral. This type of financing is best suited to borrowers with clear, long-term objectives and stable financial profiles.

How can I get a loan against property?

If you are asking, “How can I get loan against property in Dubai?”, the process typically involves:

1. Confirming whether your property is mortgage-free or requires remortgaging

2. Obtaining a professional valuation

3. Reviewing affordability based on income and liabilities

4. Comparing mortgage offers across banks

5. Completing the application, approval and registration process

Because terms and outcomes vary significantly between lenders, independent mortgage advice is strongly recommended.

Conclusion

A loan against property in Dubai is not a standalone loan product, but a form of mortgage-based financing that allows property owners to unlock value from an existing asset.

Whether structured as a new mortgage on a mortgage-free property or through remortgaging with equity release, the amount you can borrow depends on valuation, income and lender criteria, not just property ownership.

If you are considering this option, professional guidance can help you understand what is achievable and whether it aligns with your wider financial goals.

At Engel & Völkers, our independent mortgage advisors work closely with leading UAE banks to help clients assess eligibility, compare options and structure mortgage solutions that are clear, compliant and appropriate to their circumstances.