The US Federal Reserve’s decision to keep rates unchanged on Wednesday will not have a significant effect on UAE mortgages, and a 0.50 per cent rate cut, or more, is needed for “immediate noticeable changes” in borrowing costs, experts say.
Since the UAE Central Bank generally follows the Fed’s monetary policy decisions and because the UAE dirham is pegged to the US dollar, changes in Fed rates are traditionally correlated to the Emirates Interbank Offered Rate (Eibor) index. This is the rate at which banks lend to each other. A rate cut leads to a decrease in Eibor.
“A lower Eibor makes mortgages more affordable for potential homebuyers, which could lead to an increase in property demand. Moreover, homeowners with variable-rate mortgages will see an immediate reduction in their interest rates, easing their financial burden,” says Yash Trivedi, founder of mortgage advisory company YouAE Mortgages.
He adds that while many customers expect interest to likely decrease, the timing and magnitude of such reductions, however, remain uncertain at this stage. “Clients ... recognise the potential for lower interest rates in the future.”
The UAE Central Bank kept its benchmark interest rate unchanged on Wednesday, after the US Federal Reserve held its policy rate steady as Washington’s tariff war with global trading partners continues to cloud the economic outlook of the world’s biggest economy.
The Federal Open Market Committee kept the borrowing rates at 4.25 per cent to 4.50 per cent range for a second time since US President Donald Trump assumed control of the White House for another four-year term in January. The Fed cut rates by a cumulative 100 basis points last year.
The UAE Central Bank kept its base rate for the overnight deposit facility at 4.40 per cent, it said on Wednesday. It has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the base rate for all standing credit facilities.
When the Fed changes interest rates, it has a ripple effect throughout the broader economy. Lower rates make borrowing money cheaper. This encourages consumer and business spending and investment, and it can boost stock prices.
An increase in interest rates makes it more expensive for companies to raise capital. If a company is seen as cutting back on its growth or is less profitable, this will lower the price of its stock. If enough companies experience declines in their stock prices, the whole market or key indexes, such as the Dow Jones Industrial Average and S&P 500, will go down.
No major changes since last rate cut
UAE mortgages have not seen significant changes from the last Fed rate cut in December because local banks were already lending below the Eibor rate, according to Rajender Prasad, managing director of Money Maestro mortgage consultancy.
Recent trends show a drop in bank lending rates over the past four quarters as UAE banks have been passing on the effects of interest rate cuts to end users. If the Fed implements a rate cut of 0.50 per cent or more, it could lead to more immediate noticeable changes in the UAE mortgage market, potentially lowering interest rates further and stimulating the real estate market, he says.
Mr Trivedi of YouAE Mortgages highlights that many banks have already factored in anticipated interest rate reductions and are currently offering “highly competitive” mortgage rates in the market. Therefore, even if interest rates do decline, the impact on the UAE mortgage landscape may not be as significant as expected, he says.
Rent increase drives home ownership
Mohamad Kaswani, managing director of Mortgage Finder, says homebuyers are waiting on the sidelines in anticipation of a market slowdown or price correction, and most of them are rushing into the market in response to the continuous rise in rents.
Three factors are sustaining a healthy and active mortgage market in the UAE, he says.
“First, demand for ready properties remains high as more residents transition from renting to home ownership. Second, with mortgage rates now lower than rental yields, buying is increasingly seen as the more financially viable option. Third, refinancing activity is accelerating, as homeowners take advantage of rate movements to secure better terms or release equity for upgrades or investments,” Mr Kaswani explains.
Refinancing activity is increasing, driven by two key factors. Firstly, most UAE homebuyers opt for three-year fixed mortgages. With 2022 marking the start of the growth cycle, many loans are now up for renewal, prompting borrowers to seek better rates, he points out.
Additionally, strong home price appreciation means some homeowners who bought in 2022 have seen their property values double, creating an opportunity to refinance, unlock equity, and either renovate or invest in a second property.
This combination of rate dynamics and equity growth is fuelling the refinancing trend, Mr Kaswani reckons.
Mr Trivedi clarifies that it is less common for customers to pursue refinancing solely to secure lower interest rates in anticipation of further rate declines, as there are costs associated with switching from one bank to another.
Who benefits from a rate cut
Customers with existing variable-rate mortgages benefit from rate reductions immediately, according to Mr Trivedi.
Also, when the Fed indicates a potential reduction in rates, it incentivises banks to introduce more aggressive fixed-rate pricing options to support new homebuyers, he says.
Average interest rates today
The lowest interest rates currently offered by banks in the UAE are 3.75 per cent fixed for a year. However, most banks are offering a rate of 3.99 per cent fixed for three years, which includes a salary transfer, according to Mr Trivedi.
Mr Kaswani believes the “most popular” mortgage options in the UAE range from 3.99 per cent to 4.49 per cent for three-year fixed-term mortgages, with short-term variable rates as low as 3.75 per cent. He adds that mortgage rates in the Emirates remain “significantly lower” than most global markets.
“However, it’s important to understand that the lowest rate doesn’t always mean the lowest cost. Mortgage seekers should consider the overall structure of the loan, including fees, terms, early settlement penalties, and the cost of mandatory mortgage life and property insurance,” he explains.
“A slightly higher rate with more flexible terms can sometimes result in better long-term savings than a lower-rate mortgage with hidden costs. Educated decision-making, rather than seeking the lowest rate, ensures buyers secure the best mortgage for their financial goals.”
Fixed versus variable rate
Mr Prasad from Money Maestro says people prefer to opt for fixed-term rate for two or three years because it offers them certainty of cash flow and financial piece of mind for three to five years.
New homebuyers come with a certain amount of down payment while buying a home, hence they can’t manage a sudden surprise in loan repayment, which can disturb their financial discipline, he says.
Sometimes, variable rate comes with a lower margin, but the market fluctuation can impact the homebuyers’ pocket immediately, hence larger number of mortgage clients are in fixed-term pricing “if guided properly”, he adds.
However, Mr Trivedi cites how some banks are currently offering “exceptionally low” variable-rate margins for those who opt for a variable product from day one.
“This presents a unique opportunity for customers to lock in a very low margin, which they may not have the chance to do in the future. Given the current market conditions, this could be the best time to consider a variable-rate product,” he suggests.
Mortgage industry outlook
The outlook for the UAE mortgage industry in 2025 is positive, driven by lower interest rates and the handover of new properties in the market. Additionally, some banks are beginning to offer financing for off-plan properties, further boosting demand, according to Mr Trivedi.
Mr Prasad says: “Dubai has crossed Dh34 billion ($9.3 billion) worth mortgage transaction year to date in 2025. Approximately 75,000 units are expected to be handed over this year. Keeping these numbers in mind, the remaining three quarters look exciting.”
Impact on property market
Betterhomes chief executive Louis Harding says the real estate company has not experienced anything, “even anecdotally”, to suggest that buyers have been waiting for a reduction in rates before committing to buy property.
A reduction in rates is always welcomed by mortgaged buyers across different price sectors and can help to improve overall market sentiment, he explains.
“However, Dubai real estate is not experiencing a lack of confidence nor is it an overleveraged market,” Mr Harding says.
“It’s also important to remember that it has seen unprecedented price growth over the past four years, most of which was during an upward cycle in interest rates.”
UAE currency: the story behind the money in your pockets
The essentials
What: Emirates Airline Festival of Literature
When: Friday until March 9
Where: All main sessions are held in the InterContinental Dubai Festival City
Price: Sessions range from free entry to Dh125 tickets, with the exception of special events.
Hot Tip: If waiting for your book to be signed looks like it will be timeconsuming, ask the festival’s bookstore if they have pre-signed copies of the book you’re looking for. They should have a bunch from some of the festival’s biggest guest authors.
Information: www.emirateslitfest.com
Killing of Qassem Suleimani
Zayed Sustainability Prize
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KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
If you go
The flights
Emirates and Etihad fly direct to Nairobi, with fares starting from Dh1,695. The resort can be reached from Nairobi via a 35-minute flight from Wilson Airport or Jomo Kenyatta International Airport, or by road, which takes at least three hours.
The rooms
Rooms at Fairmont Mount Kenya range from Dh1,870 per night for a deluxe room to Dh11,000 per night for the William Holden Cottage.
The five pillars of Islam
Killing of Qassem Suleimani
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
Killing of Qassem Suleimani
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Zayed Sustainability Prize
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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The five pillars of Islam
KILLING OF QASSEM SULEIMANI
Race card:
6.30pm: Baniyas (PA) Group 2 Dh195,000 1,400m.
7.05pm: Maiden (TB) Dh165,000 1,400m.
7.40pm: Handicap (TB) Dh190,000 1,200m.
8.15pm: Maiden (TB) Dh165,000 1,200m.
8.50pm: Rated Conditions (TB) Dh240,000 1,600m.
9.20pm: Handicap (TB) Dh165,000 1,400m.
10pm: Handicap (TB) Dh175,000 2,000m.
2.0
Director: S Shankar
Producer: Lyca Productions; presented by Dharma Films
Cast: Rajnikanth, Akshay Kumar, Amy Jackson, Sudhanshu Pandey
Rating: 3.5/5 stars
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The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Results
6.30pm: Dubai Millennium Stakes Group Three US$200,000 (Turf) 2,000m; Winner: Ghaiyyath, William Buick (jockey), Charlie Appleby (trainer).
7.05pm: Handicap $135,000 (T) 1,600m; Winner: Cliffs Of Capri, Tadhg O’Shea, Jamie Osborne.
7.40pm: UAE Oaks Group Three $250,000 (Dirt) 1,900m; Winner: Down On Da Bayou, Mickael Barzalona, Salem bin Ghadayer.
8.15pm: Zabeel Mile Group Two $250,000 (T) 1,600m; Winner: Zakouski, James Doyle, Charlie Appleby.
8.50pm: Meydan Sprint Group Two $250,000 (T) 1,000m; Winner: Waady, Jim Crowley, Doug Watson.
Killing of Qassem Suleimani
The years Ramadan fell in May
Spain drain
CONVICTED
Lionel Messi Found guilty in 2016 of of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying €4.1m in taxes on income earned from image rights. Sentenced to 21 months in jail and fined more than €2m. But prison sentence has since been replaced by another fine of €252,000.
Javier Mascherano Accepted one-year suspended sentence in January 2016 for tax fraud after found guilty of failing to pay €1.5m in taxes for 2011 and 2012. Unlike Messi he avoided trial by admitting to tax evasion.
Angel di Maria Argentina and Paris Saint-Germain star Angel di Maria was fined and given a 16-month prison sentence for tax fraud during his time at Real Madrid. But he is unlikely to go to prison as is normal in Spain for first offences for non-violent crimes carrying sentence of less than two years.
SUSPECTED
Cristiano Ronaldo Real Madrid's star striker, accused of evading €14.7m in taxes, appears in court on Monday. Portuguese star faces four charges of fraud through offshore companies.
Jose Mourinho Manchester United manager accused of evading €3.3m in tax in 2011 and 2012, during time in charge at Real Madrid. But Gestifute, which represents him, says he has already settled matter with Spanish tax authorities.
Samuel Eto'o In November 2016, Spanish prosecutors sought jail sentence of 10 years and fines totalling €18m for Cameroonian, accused of failing to pay €3.9m in taxes during time at Barcelona from 2004 to 2009.
Radamel Falcao Colombian striker Falcao suspected of failing to correctly declare €7.4m of income earned from image rights between 2012 and 2013 while at Atletico Madrid. He has since paid €8.2m to Spanish tax authorities, a sum that includes interest on the original amount.
Jorge Mendes Portuguese super-agent put under official investigation last month by Spanish court investigating alleged tax evasion by Falcao, a client of his. He defended himself, telling closed-door hearing he "never" advised players in tax matters.
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UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
Mohammed bin Zayed Majlis
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The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
Zayed Sustainability Prize
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WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EQureos%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EUAE%0D%3Cbr%3E%3Cstrong%3ELaunch%20year%3A%20%3C%2Fstrong%3E2021%0D%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%20%3C%2Fstrong%3E33%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3ESoftware%20and%20technology%0D%3Cbr%3E%3Cstrong%3EFunding%3A%20%3C%2Fstrong%3E%243%20million%0D%3Cbr%3E%3C%2Fp%3E%0A
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Jordan cabinet changes
In
- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
- Falah Abdalla Al Ammoush, Minister of Public Works and Housing
- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
- Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
- Mounir Moussa Ouwais, Minister of Water and Agriculture
- Dr Azmi Mahmud Mohafaza, Minister of Education
- Mokarram Mustafa Al Kaysi, Minister of Youth
- Basma Mohamed Al Nousour, Minister of Culture
Mohammed bin Zayed Majlis
