What Is The Average Interest Rate For A Mortgage In Dubai?

Understanding mortgage rates in Dubai 

Like any city in the world, the mortgage rates in Dubai are subject to change every month. There are different types of mortgages available for apartments, houses, or commercial property that buyers can select from depending on their requirements. 

How mortgage rates work in Dubai 

If you are looking to buy an apartment, house, or commercial property in Dubai on a mortgage, then you should familiarise yourself with how mortgage rates work in the city.

In Dubai, a property mortgage generally requires a deposit of at least 15% of the property’s value for UAE Nationals, or 20% for Residents.

The remainder of the property's price is then financed by the bank, with the buyer agreeing to a set repayment schedule which specifies interest rates and instalment amounts.

Mortgage terms can range from 5 to 25 years with varying interest rates, depending on the product chosen, property type and your profile.

Current average mortgage interest rates in Dubai 

As of October 2025, the average mortgage rates in Dubai for residential properties range from 3.89% and 4.99%.

This rate can vary according to factors such as 

• The bank/lender 

• The type of property (residential vs commercial)

• Your credit score

• Your income

• Whether you do salary transfer or nit

• Mortgage term length 

• The type of mortgage you select

There are different mortgage types you can select from - the most popular ones being either a fixed mortgage or a variable mortgage. 

Best Available Fixed Rates in Dubai

As of October 2025, the best mortgage rate available in Dubai is approximately 3.89%, a highly competitive rate by global standards.

The exact best rate depends on your eligibility, the fixed-rate term and also whether you choose salary transfer or not (whether your salary is paid into the same bank as your mortgage).

Whilst the best available interest rates will change over time, and also depend on your personal circumstances, working with an independent mortgage broker will give you access to the best interest rates in the market.

Fixed vs variable mortgage interest rates 

A crucial decision for any homebuyer is choosing between a fixed-rate and variable-rate mortgage.

A fixed-rate mortgage has a pre-set interest rate which remains the same for a certain repayment period. This mortgage interest rate is set before the repayment period begins and usually lasts for up to five years. 

However, the interest rate will usually change to a higher rate once the fixed repayment period ends. 

Here are some factors to consider for a fixed-rate mortgage:

• Easier to budget loan repayments 

• A higher reversion rate may impact the mortgage buyer once the fixed repayment period ends 

• The buyer is protected from a sudden increase in interest rates 

• There is no gain from a decrease in the Emirates InterBank Offer Rate (EIBOR) - the benchmark mortgage interest rate for lending banks in the UAE.

On the other hand, variable-rate mortgages have interest rates which can fluctuate over the repayment period. This means that a change in EIBOR will impact the variable mortgage rates in Dubai.

Here are some factors to consider for a variable rate mortgage:

• Currently, interest rates on fixed rate mortgages are lower than variable rates, though this is not always the case.

• If the EIBOR falls, buyers pay a lower interest rate on their mortgage 

• It is difficult to set a budget due to interest rate fluctuations 

• If the EIBOR rises, the interest rates and monthly payments will increase 

Average mortgage rates for residential properties

As of July 2025, the average mortgage rate for residential properties in Dubai varies from 3.89% to 4.99%. 

Average mortgage rates for commercial properties 

Interest rates for commercial property mortgages in Dubai are significantly higher than those for residential mortgages.

As of July 2025, the average mortgage rates for commercial properties is above 6%.

How to secure the best mortgage rates in Dubai 

There are certain steps you can take to secure the best mortgage rates for your property.

These steps will help you come across as a credible buyer in front of lenders/banks and secure lower rates for your loan. 

1. Improving your credit score 

A credit score is a three-digit metric between 300 and 900, which banks and lenders use to predict the likeliness of a mortgage buyer repaying their loan on time. As a mortgage buyer, your credit score is calculated from a collection of data by banks or organizations wherein you have an account or credit. 

In the UAE, a good credit score is widely thought to be equal to or above 680 points. A score below 620 is considered a bad credit score, which will make it harder for you to secure a good interest rate or even a mortgage altogether.

Kindly note that the credit score criteria may differ per bank/lender, so it is important to follow up with them regarding their credit score system. 

You can improve your credit score by:

• Always paying your bills on time

• Reducing any high interest debt that you have

• Decreasing your credit utilization

2. Comparing offers from different lenders 

Once you have received offers from different lenders/banks, ensure that you draw up a comparison to decide which property mortgage is good for you. 

Here are some factors you should consider before making the decision: 

• Compare all the different interest rates offered on the mortgage and how any change in the rates may impact your payments over time. 

• Understand the mortgage term repayment period. For example, long repayment terms may have lower monthly payment rates but result in a higher total interest. 

• Ask for all the fees associated with the mortgage including appraisal fees, potential penalties, and processing fees. 

It is highly recommended that you speak to an experienced mortgage advisor who can compare all of the available mortgages on your behalf to select the most suitable options.

Common mortgage terms and conditions in Dubai

When buying an apartment or a house in Dubai with a mortgage, there are certain terms and conditions you will come across and have to understand for a smooth process. 

Here are some common mortgage terms and conditions in Dubai: 

Loan-to-value (LTV) ratio 

The loan-to-value ratio (LTV) measures how much money you can borrow compared to the valuation of the property you want to buy. It is calculated through the following formula: 

LTV = 100 x Loan Amount/Property Value 

The loan-to-value ratio (LTV) in mortgages is a way to measure how much money you can borrow compared to the value of the property you want to buy. 

The maximum LTV for expats in Dubai is 80% while for Emiratis it is 85%.

Mortgage tenure

A mortgage tenure is the duration of your mortgage. How long or short your mortgage tenure is may impact your finances and budgeting in the long term. 

Depending on your contract with the lender/bank, your mortgage tenure may be anywhere between three to 25 years. You can negotiate your mortgage tenure based on your property valuation and finances. 

Early repayment penalties 

Early repayment penalties are charges imposed by a lender/bank when a mortgage buyer repays their loan before the scheduled term. 

These penalties are safeguards for lenders/banks as they have to compensate for the potential lost interest income because of early mortgage repayment. 

Key Takeaways

With average mortgage interest rates in Dubai ranging from 3.89% to 4.99% for residential properties, even a small difference in your rate can have a major impact on your long-term costs. From choosing between fixed and variable options to negotiating repayment terms, navigating the mortgage landscape in Dubai can be complex, especially for first-time buyers or non-residents.

That’s why working with an independent mortgage broker is one of the smartest moves you can make. A broker can compare offers from multiple banks, secure access to exclusive rates and advise on the best mortgage type based on your budget and goals

Whatever your goals, using a broker ensures you’re getting the most competitive interest rate and a deal that’s aligned with your long-term plans.

Ready to take the next step? Speak to a qualified mortgage advisor today and make your property purchase in Dubai as smooth and cost-effective as possible.