Off-Plan Mortgage in Dubai: Process, Benefits and Eligibility Criteria

How Do Off-Plan Mortgages Work?

An off-plan mortgage is a home loan that allows buyers to finance part of a property purchase before the property is completed. Unlike traditional mortgages, which are typically issued after handover, off-plan mortgages enable buyers to secure funding during the construction phase.

The bank releases funds in stages, aligned with the project’s construction progress, allowing the payment plan installments to be covered by the bank rather than the buyer.

Off-Plan Mortgage Rules (2025)

In July 2025, a new mortgage product has been introduced by one of the UAE’s leading banks, making this financing option much more widely available to buyers in Dubai.

Here’s how it works under the new off-plan mortgage Dubai rules:

• Project Completion Requirement: The project must be at least 40% complete before the bank will approve financing.

• Buyer Contribution: The buyer must have already paid at least 50% of the property price. The remaining 50% can then be financed through the mortgage.

• Tranche Release: As each construction tranche is completed and the next developer installment is due, the bank will release the corresponding funds directly to the developer.

• Pre-Approval: The process is the same as for regular mortgages. A pre-approval can be secured in advance and is valid for up to 90 days.

• Income Criteria: Buyers must have an earned income from a salary or self-employment. Dividends or investment income alone are not considered sufficient.

This new structure makes off-plan property mortgage in Dubai a more realistic option for a wider range of buyers, especially those who prefer to avoid paying 100% of the property cost by handover.

Interest Rates Of Off-Plan Mortgages

As of July 2025, the leading interesting rate for off-plan mortgages in Dubai is:

• 4.49% fixed for 3 years with salary transfer

• 4.99% fixed for 3 years without salary transfer

Eligibility for an Off-Plan Mortgage in Dubai

Eligibility for an off-plan mortgage Dubai has always been stricter compared to regular mortgages. With the recent updates, the process remains relatively straightforward but limited to specific top developers.

You should ensure that the developer is on the approved list of developers (detailed later) against which a bank is willing to lend. The bank will also assess your age, income stability, and credit history, just as with a conventional mortgage.

If you have a strong salary record or are self-employed with sufficient verifiable income, and the project meets the 40% completion requirement, your chances of securing a mortgage for off-plan property are now much higher.

Advantages & Disadvantages of Off-Plan Mortgages

Potential Advantages

• Lower Initial Outlay: Typically, off-plan properties are paid in full by the buyer upon handover. An off-plan mortgage allows 50% of the property to be financed, reducing the initial outlay.

• Longer Financing Timeline: An off-plan mortgage allows 50% of the property to be paid for over a period of up to 25 years, significantly longer than developer's payment plans.

• Improved Cash Flow Flexibility: Financing part of the purchase can help buyers maintain liquidity for other investments or expenses.

• Overcome Financial Constraints: Buyers who encounter unexpected cash shortfalls could use an off-plan mortgage to avoid issues with affording the purchase.

Potential Disadvantages

• Higher Overall Cost: Unlike interest-free developer payment plans, mortgages incur interest charges, increasing the total cost of ownership.

• Limited Developer Availability: Only select projects and developers are eligible for off-plan financing.

• Structured Payment Releases: Funds are disbursed in tranches based on construction progress, requiring coordination between bank and developer.

• Interest Rate Considerations: Fixed rates (4.49% or 4.99%) are competitive but could be higher than standard ready-property mortgages.

Approved Developers for Off-Plan Mortgages

As of July 2025, off-plan mortgages are only available for properties by select, well-established developers. These are:

• Emaar

• Dubai Holding

• Majid Al Futtaim

• Al Wasl Group

• Aldar (Dubai projects)

• Sobha

• Damac

• Ellington

• Omniyat

• Binghatti

If your chosen developer is not on this list, you will need to consider alternative financing options, such as the developer's payment plans.

Alternative to Off-Plan Mortgages

While off-plan mortgages are an option in Dubai, their more limited availability and strict criteria can make them difficult to secure.

There are alternative financing strategies that could offer you more flexibility:

• Developer Payment Plans: Many reputable developers offer flexible payment structures, including post-handover plans, where a significant portion of the property price is paid after handover. These payment plans allow buyers to spread their payments across a longer period without relying on a mortgage during construction.

• Mortgage at Handover: Another common approach is to pay the initial instalments as per the construction-linked plan and then secure a traditional mortgage upon handover of the completed property. At this stage, more banks are willing to finance, and standard mortgage terms apply.

How to Apply for an Off-Plan Mortgage in Dubai

If you’ve already purchased or reserved an off-plan property, the first step to securing an off-plan mortgage is to speak with a qualified mortgage advisor.

They will assess your eligibility based on your income, the project’s completion status, and the developer’s approval status with participating banks.

Here’s how the process typically works:

1. Speak to a Mortgage Advisor: A licensed advisor can help you understand whether your property qualifies for off-plan financing and what documentation you’ll need to provide.

2. Check Developer and Project Eligibility: Confirm that your off-plan property is at least 40% complete and that the developer is on the bank’s approved list.

3. Secure Mortgage Pre-Approval: If eligible, the advisor will help you apply for pre-approval from a bank. This document is typically valid for up to 90 days and outlines your borrowing capacity.

4. Submit Financing Application: Once pre-approved, your mortgage advisor will assist in submitting a formal application based on your payment history and remaining balance.

5. Bank Releases Funds in Tranches: Upon approval, the bank will disburse the loan in stages, aligned with the developer’s construction schedule and remaining payment milestones.

Conclusion

Until recently, off-plan property mortgages in Dubai were a rare, restrictive product. With the new July 2025 off-plan mortgage product, buyers now have the opportunity to finance up to 50% of the property cost during construction, provided the project is at least 40% complete and from an approved developer.

At Engel & Völkers Dubai, we continue to advise clients to evaluate all financing options, including off-plan mortgages, to ensure the right balance of cost, convenience, and long-term value.

Speak to our experts to explore whether the new off-plan mortgage Dubai options suit your needs and take the next steps.