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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Cast: Olivia Cooke, Bill Nighy, Douglas Booth
Three stars
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Uefa Champions League, Group C
Liverpool v Red Star Belgrade
Anfield, Liverpool
Wednesday, 11pm (UAE)
The biog
Favourite Emirati dish: Fish machboos
Favourite spice: Cumin
Family: mother, three sisters, three brothers and a two-year-old daughter
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
'Brazen'
Director: Monika Mitchell
Starring: Alyssa Milano, Sam Page, Colleen Wheeler
Rating: 3/5
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
The biog
First Job: Abu Dhabi Department of Petroleum in 1974
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work
The low down
Producers: Uniglobe Entertainment & Vision Films
Director: Namrata Singh Gujral
Cast: Rajkummar Rao, Nargis Fakhri, Bo Derek, Candy Clark
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Five personal finance podcasts from The National
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Should you buy or rent a home in the UAE?
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
How to help
Call the hotline on 0502955999 or send "thenational" to the following numbers:
2289 - Dh10
2252 - Dh50
6025 - Dh20
6027 - Dh100
6026 - Dh200
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
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Thursday Beat Sydney 2-0 in Sydney
Saturday v Western Sydney Wanderers in Sydney
Wednesday v Bayern Munich in Shanghai
July 22 v Chelsea in Beijing
July 29 v Benfica in London
July 30 v Sevilla in London
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
UAE currency: the story behind the money in your pockets
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Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
Rating: Two out of five stars
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
Killing of Qassem Suleimani
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Ziauddin Yousafzai told The National his daughter was ‘very happy’ with her husband.
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Starring: Akshay Kumar, Sonam Kapoor, Radhika Apte
Three-and-a-half stars
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
MATCH INFO
Uefa Champions League semi-finals, second leg:
Liverpool (0) v Barcelona (3), Tuesday, 11pm UAE
Game is on BeIN Sports
Armies of Sand
By Kenneth Pollack (Oxford University Press)
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if you go
The flights
Etihad and Emirates fly direct to Kolkata from Dh1,504 and Dh1,450 return including taxes, respectively. The flight takes four hours 30 minutes outbound and 5 hours 30 minute returning.
The trains
Numerous trains link Kolkata and Murshidabad but the daily early morning Hazarduari Express (3’ 52”) is the fastest and most convenient; this service also stops in Plassey. The return train departs Murshidabad late afternoon. Though just about feasible as a day trip, staying overnight is recommended.
The hotels
Mursidabad’s hotels are less than modest but Berhampore, 11km south, offers more accommodation and facilities (and the Hazarduari Express also pauses here). Try Hotel The Fame, with an array of rooms from doubles at Rs1,596/Dh90 to a ‘grand presidential suite’ at Rs7,854/Dh443.
