In today's highly competitive mortgage market, buoyed by substantial liquidity in the banking sector, lenders are continuously striving to offer the most attractive home loan options to borrowers.
However, it’s crucial to look beyond the headline interest rate and consider factors like processing fees, insurance costs, overpayment options, and more to assess the full value of a mortgage product.
Partial/full early repayment
A big factor to consider is whether the mortgage includes penalties for early repayment. If there’s a chance you might pay off your loan ahead of schedule – perhaps because of an annual bonus or unexpected windfall – choosing a product with flexible repayment terms could be more beneficial in the long term.
If an applicant has surplus cash, then they can pay it towards the principal outstanding with the bank and save on interest.
Most banks in UAE allow up to 30 per cent partial overpayment of the mortgage every calendar year for free. If an applicant follows the same drill for three years, then the mortgage will be settled within three years.
If an applicant wants to settle the mortgage fully, then there are two options. If the mortgage is settled fully by an applicant by selling the property, then there is zero penalty to do an early settlement.
If the applicant pays off their mortgage using their savings, the first 30 per cent of the outstanding mortgage balance paid off within a calendar year will not incur any penalties.
For any amount beyond that 30 per cent, the bank will charge a fee of 1 per cent of the remaining balance or Dh10,000 ($2,722), whichever is less.
Tenure
The loan tenure impacts your monthly payments. Most banks set a cut-off age of 65 for salaried applicants, but a few extend this to 70. Extending the tenure can lower your monthly payments and possibly increase the loan amount you can qualify for.
Salary transfer loan vs non-salary transfer loan
Banks encourage applicants to apply for a salary transfer loan (STL) by offering lower interest rates and waiving processing fees.
In contrast, a non-salary transfer loan typically has an interest rate that is 0.25 per cent higher than an STL, and there is a one-time processing fee ranging from 0.25 per cent to 0.50 per cent.
Valuation contest allowance
This is an important factor when choosing a mortgage provider. Some banks do not allow applicants to contest the valuation of a property if it is undervalued.
In such cases, the applicant either must switch mortgage providers, hoping to get a better valuation, or increase the downpayment beyond the minimum required to cover the shortfall caused by the undervaluation.
Also note that the valuation cost charged by a bank typically ranges from Dh2,500 to Dh3,000 plus VAT per property.
Power of attorney transactions
Confirm with the property seller whether the payment should be made directly to them or to someone with power of attorney (POA).
Some banks do not allow payments to POA holders, so choose a lender that accommodates the specific payment requirements.
Same rate migration
If an applicant plans to move abroad but wants to keep the resident salaried rate as a non-resident, they should choose a bank that allows them to retain the same rate after relocating.
Interest rates
In the UAE, mortgage interest rates are offered as hybrid or fully variable options from day one. The hybrid option is the most popular, with a fixed rate for the first one to five years, followed by a follow-on rate, which includes a bank profit margin plus Eibor.
Current rates start as low as 3.79 per cent fixed for two years, 3.99 per cent for three years, and 3.98 per cent for five years.
Associated fees
When purchasing a property, buyers must cover additional costs like the 4 per cent Dubai Land Department fee and 2 per cent agency commission.
Some banks will finance a portion of these costs, matching the loan-to-value percentage, while others do not. Applicants should confirm this with their mortgage provider when applying.
Tailor your mortgage to your needs
With a wide range of mortgage products available, it’s essential to select one that aligns with your financial circumstances. There’s no one-size-fits-all solution and choosing the wrong product can lead to costly consequences down the line.
Parth Wadhwa is senior mortgage adviser at Espace Real Estate
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Strait of Hormuz
Fujairah is a crucial hub for fuel storage and is just outside the Strait of Hormuz, a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond.
The strait is 33 km wide at its narrowest point, but the shipping lane is just three km wide in either direction. Almost a fifth of oil consumed across the world passes through the strait.
Iran has repeatedly threatened to close the strait, a move that would risk inviting geopolitical and economic turmoil.
Last month, Iran issued a new warning that it would block the strait, if it was prevented from using the waterway following a US decision to end exemptions from sanctions for major Iranian oil importers.
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Defending champions
World Series: South Africa
Women’s World Series: Australia
Gulf Men’s League: Dubai Exiles
Gulf Men’s Social: Mediclinic Barrelhouse Warriors
Gulf Vets: Jebel Ali Dragons Veterans
Gulf Women: Dubai Sports City Eagles
Gulf Under 19: British School Al Khubairat
Gulf Under 19 Girls: Dubai Exiles
UAE National Schools: Al Safa School
International Invitational: Speranza 22
International Vets: Joining Jack
AGL AWARDS
Golden Ball - best Emirati player: Khalfan Mubarak (Al Jazira)
Golden Ball - best foreign player: Igor Coronado (Sharjah)
Golden Glove - best goalkeeper: Adel Al Hosani (Sharjah)
Best Coach - the leader: Abdulaziz Al Anbari (Sharjah)
Fans' Player of the Year: Driss Fetouhi (Dibba)
Golden Boy - best young player: Ali Saleh (Al Wasl)
Best Fans of the Year: Sharjah
Goal of the Year: Michael Ortega (Baniyas)
Did you know?
Brunch has been around, is some form or another, for more than a century. The word was first mentioned in print in an 1895 edition of Hunter’s Weekly, after making the rounds among university students in Britain. The article, entitled Brunch: A Plea, argued the case for a later, more sociable weekend meal. “By eliminating the need to get up early on Sunday, brunch would make life brighter for Saturday night carousers. It would promote human happiness in other ways as well,” the piece read. “It is talk-compelling. It puts you in a good temper, it makes you satisfied with yourself and your fellow beings, it sweeps away the worries and cobwebs of the week.” More than 100 years later, author Guy Beringer’s words still ring true, especially in the UAE, where brunches are often used to mark special, sociable occasions.
Is it worth it? We put cheesecake frap to the test.
The verdict from the nutritionists is damning. But does a cheesecake frappuccino taste good enough to merit the indulgence?
My advice is to only go there if you have unusually sweet tooth. I like my puddings, but this was a bit much even for me. The first hit is a winner, but it's downhill, slowly, from there. Each sip is a little less satisfying than the last, and maybe it was just all that sugar, but it isn't long before the rush is replaced by a creeping remorse. And half of the thing is still left.
The caramel version is far superior to the blueberry, too. If someone put a full caramel cheesecake through a liquidiser and scooped out the contents, it would probably taste something like this. Blueberry, on the other hand, has more of an artificial taste. It's like someone has tried to invent this drink in a lab, and while early results were promising, they're still in the testing phase. It isn't terrible, but something isn't quite right either.
So if you want an experience, go for a small, and opt for the caramel. But if you want a cheesecake, it's probably more satisfying, and not quite as unhealthy, to just order the real thing.
Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
UAE currency: the story behind the money in your pockets
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Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
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Price: From Dh117,059
Bundesliga fixtures
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
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UAE currency: the story behind the money in your pockets
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
