8 Things to Know Before Getting a House Loan Pre Approval in Dubai

Getting pre-approved for a house loan in Dubai is a crucial first step in your property buying journey. Whether you’re a first-time buyer or an experienced investor, understanding the home loan pre approval process can significantly streamline your home purchase experience.
A mortgage pre approval in Dubai not only gives you a clear picture of your budget but also strengthens your position when negotiating with sellers. From determining your down payment requirements to exploring Dubai Islamic mortgage options, there are several key factors to consider before initiating your mortgage application.
Here are 8 things to know before applying for a home loan pre approval so you can make a confident decision when buying a property.
1. What’s a Home Loan Pre Approval?
It is an approval letter issued from the bank that guarantees your eligibility for a house loan in Dubai. It highlights the maximum amount you can borrow from that bank.
Keep in mind, banks have their own criteria to access their risk and determine how much they can lend you, so your maximum loan amount may vary from bank to bank.
Just because you qualify for a big loan doesn’t mean you can afford it!
Buying “too much home” can quickly turn your home into a liability instead of an asset. Know how much you can afford before you ever start looking at homes.
2. How do I Qualify for a Home Loan Pre Approval? (Salaried / Self-employed)
- Minimum monthly salary of AED 15,000. Self Employed AED 25,000.
- 6 months of employment at your current company
- Have the down payment funds of at least 20% on property valued at AED 5 million and 30% on property valued over AED 5 million. Off-plan will be at 50%.
- Age limit between 21 years – 65 years old. 70 if self-employed.
3. How much Down Payment do you Need in Dubai?
The minimum down payment in the UAE is 20% of the property value, and there will be additional upfront costs and fees of 7% – 8% of the property value.
Some banks can include financing the upfront fees (about 5%) in your mortgage loan. Ideally, you should have at least 22%-23% of the property value saved up as your down payment.
4. How Much ‘Home’ can I Borrow?
The amount you can borrow for a property depends on a few factors:
- Your overall income and salary
- Any housing allowance
- Your existing debt (car loan, credit cards, other personal loans)
- Family status (single, married, any dependants)
- Nationality (non-UAE national 80% LTV, national 85% LTV)
- Your age (Age limit for a mortgage is 21 years – 65 years old if expat, 70 years if UAE national or self-employed)
Tip: We particularly like this Dubai mortgage calculator as it calculates all the up-front costs, shows you the recurring monthly cost, and customizes your service charge based on the size of the property.
5. How to find Best Mortgage Rates in Dubai?
Mortgage brokers have working relationships with the banks and have access to the best and latest mortgage rates in Dubai. They help you get home loan pre approvals, compare rates in Dubai and bank offers, and submit your applications, so you don’t have to spend the time to contact each individual bank for their rates, or handle the tedious paperwork.
For a quick market comparisons, platform like Yalla Compare showcase current Dubai mortgage rates based to your profile, including both traditional and Dubai Islamic mortgage options. You can easily filter by bank and compare additional features like free property evaluations – helping you understand what’s available before starting your pre-approval journey.
Important: Avoid using the same bank for your house loan in Dubai and for receiving your salary. This protects your end-of-service benefits from being frozen if you change jobs during your loan term. If your salary bank has a better deal for mortgage rates, change your salary account to another bank.
6. What’s a Dubai Islamic Mortgage?
Dubai Islamic mortgage is an interest-free loan. In Islam, a loan is meant to be a charitable arrangement and not a way to earn money.
It allows Muslims, and others, to buy a property while still being compliant with Sharia law. These Sharia-compliant options, based on Ijara (lease) or Murabaha (cost-plus financing) structures, often have competitive profit rates and flexible terms. The bank buys the property on behalf of the buyer, and then resells it back to them at a profit. Profit rates are linked to EiBOR rate.
Tip: Do your due diligence and make sure the property is indeed compatible with Dubai Islamic mortgage before committing to an offer or paying any fees. Otherwise, it will need to be changed to a conventional mortgage or appeal to the legal team, which will take up more time and resources (i.e. paying more rent while waiting for the outcome).
7. Is it Better to have a Joint Mortgage or Keep Under One Name?
Question to ask yourself. How will you handle the mortgage payment if your circumstances change? i.e loss of employment, divorce, death. Typically, single name mortgage is preferred if you have plans to purchase more properties in the future.
Once you have a mortgage under your name, you are allowed a maximum of 65% LTV for the next property. Additionally, should you fall into financial difficulties, only one of you will be held legally liable if there is a default.
Joint mortgage is beneficial if it helps with affordability.
8. Can I get a House Loan in Dubai for an Off Plan Property?
To qualify for a home loan for an off plan property, the off plan property needs to have a handover notice or at the handover payment stage. A handover payment is the final payment you make to secure your off plan property purchase.
Each developer has their own payment plans, hence the handover payment % may vary. For example, if you have paid the developer 50% of the property value during the payment plan period, you can borrow the remaining 50% due upon handover as a mortgage.
Keep in mind, not all banks offer home loan pre approval for an off plan property due to the risks involved. Some banks will only finance projects from top-tier developers like Emaar, Nakheel, Dubai Properties, and Meraas.