# Home Loan Interest Rate in UAE & Dubai
**Published:** 2024-09-23T06:47:41.064Z
**Updated:** 2026-07-30T16:30:44.883Z
**Author:** Paisabazaar UAE
**Original Url:** https://www.paisabazaar.ae/mortgage-loan/articles/home-loan-interest-rate-in-uae/
Get the lowest home loan interest rates, regardless of the type of rate you select. Enjoy competitive rates, high loan amount, flexible loan repayment period, no salary transfer requirements, and much more. Apply now with Paisabazaar.ae and enjoy exceptional offers.
## Home Loan Interest Rate in UAE
A home loan, or mortgage, is a financial product that allows you to purchase property by borrowing funds from a bank or other lending institutions. The loan is repaid over a specified period, usually with interest.
Understanding home loan interest rates in UAE is crucial as they directly impact your monthly payments and overall loan costs. These rates can vary based on factors, such as the central bank's policies, inflation, and your credit profile. Having a fundamental understanding of interest rate structures is essential for making well-informed decisions and managing your finances better.
Table of Content
* [Home Loan Interest Rate in UAE](#home-loan-interest-rate-in-uae)
* [Types of Home Loan Interest Rates](#types-of-home-loan-interest-rates)
* [Top Banks Home Loan Interest Rates in Dubai, UAE](#top-banks-home-loan-interest-rates-in-dubai-uae)
* [Factors Affecting Mortgage Interest Rates](#factors-affecting-mortgage-interest-rates)
* [Frequently Asked Questions](#frequently-asked-questions)
## Types of Home Loan Interest Rates
In the UAE, individuals can choose between two types of house loan interest rates— Fixed Interest Rate and Reducing Interest Rate.
**Let us understand these with examples:**
### Flat Rate Interest
**Story:** Ahmed buys his dream home and opts for a flat rate loan. He benefits from consistent monthly payments, making his budgeting simpler. However, he ends up paying more in total interest compared to a reducing rate loan because the interest is calculated on the original loan amount throughout the term.
Ahmed takes out a home loan of AED 500,000 at a flat rate of 5% for 10 years. The flat rate means the interest is calculated on the full principal amount throughout the loan term.
Each year, Ahmed pays interest on AED 500,000, which amounts to AED 25,000 annually. This flat rate results in a constant interest payment of AED 25,000 every year, irrespective of how much principal he has repaid.
Tap to get an in-depth understanding of fixed interest rate home loans!
### Reducing Balance Interest
**Story:** Jessica buys her home and opts for a reducing balance loan. As she makes payments, she notices her interest charges decrease because the interest is calculated on the lesser remaining amount. She ends up paying less interest over the life of the loan compared to the flat rate option, making her overall cost lower.
Jessica applies for a mortgage loan of AED 500,000, but with a reducing balance interest rate of 5% for the same term. With this method, the interest is calculated on the remaining principal amount as it decreases over time.
Initially, Jessica pays interest on the full AED 500,000, but as she repays the principal each month, the outstanding amount decreases, leading to a reduction in her interest payments. Consequently, as the principal decreases, her interest payments also decrease.
Tap to get an in-depth understanding of reducing interest rate home loans!
## Top Banks Home Loan Interest Rates in Dubai, UAE
Given below are the top 8 home loans, home loan interest rates, and their interest rates in the UAE:
| Bank Home Loan | Interest Rate | Features/ Benefits |
| --- | --- | --- |
| RAKBANK- Home In One | Reducing Rate- Starting at 4.03% per annum (fixed for 5 years) | Easy access to funds at any time
Zero in-principle approval fees |
| Standard Chartered- Saadiq Home Finance | 3 Months- 4.98% EIBOR
6 Months- 4.89% EIBOR
12 Months- 4.66% EIBOR
36 Months- 4.2% SCBLR/SCBMR
60 Months- 4.12% SCBLR/SCBMRNote: Rates as on 7th August 2024 | No valuation or processing fees
Complimentary property Takaful for life
Quick loan application approval within 2-7 working days
Repayment tenure of up to 25 years
Access to home finance details via mobile banking |
| Emirates NBD Home Loans for UAE Nationals | Tentative Reducing Rates- Starting at 7.15% per annum | Finance up to 85% of the property value
Loan available for self-employed and salaried employees
Apply with a co-borrower
No application fees
Complimentary property and life insurance
Mortgage available for Government Housing Programmes
Free partial settlement during the duration of the loan |
| Emirates NBD Home Loans for UAE Expats | Tentative Reducing Rates- Starting at 7.15% per annum | Finance up to 85% of the property value
Loan available for self-employed and salaried employees
Apply with a co-borrower
No application fees
Complimentary property and life insurance
Free partial settlement of up to 20% of the loan amount |
| Emirates Islamic- Home Finance Manzili | Profit Rate (Indicative)
Benchmark Rate (1/ 3/ 6/ 12 months EIBOR) + Margin ranging from 1.74% to 4.25% per annum
APR (Indicative)
Benchmark Rate (1/ 3/ 6/ 12 months EIBOR) + Margin ranging from 1.83% to 4.35% per annum | Availability of variable and variable + fixed rates
High finance amount of up to 80% of the property (for expats) and 85% of the property (for UAE nationals)
Loan solutions for buying, transferring, and cash release for freehold properties in the UAE
Flexible loan repayment tenure of up to 25 years |
| ADCB- Standard Mortgage Loan | Starting from 4.5% per annum | Interest RatesHybrid Option: Fixed rates for initial years and variable later
Variable Rate Option: EIBOR + Margin
Finance amount — up to 85% of the property value for UAE nationals and up to 80% for UAE expats
Finance amount of up to 50% of the property value for non-residents
200 TouchPoints for every AED 1,000 of the loan amount
Partial settlement of mortgage at any time
Switch to a different home loan variant during the loan tenure at any time
Availability of after-sales mortgage helpline and service
Flexible loan repayment tenure of up to 15 years for Non-residents and up to 25 years for UAE nationals and expats |
| Sharjah Islamic Bank- Real Estate Finance | Reducing Rate- Starting from 4.25% per annum | Finance amount of up to AED 8 million
Flexible loan tenure of up to 25 years
Availability of multiple fixed-rate period options - 1, 3, and 5 years
Salary transfer not required
Loan available for self-employed and salaried individuals
Wide geographical coverage
Get a pre-approved loan |
| CBI Home Loan for Salaried Individuals | Interest rates range from 3.49% to 4.5% per annum | Salary transfer not mandatory
Loan available for self-employed and salaried individuals
Quick loan application processing
Complimentary Reward Mastercard credit card for life without any annual fee
Open a new home loan savings account with 2% interest per annum and no cap
Free upgrade to the CBI First priority |
## Factors Affecting Mortgage Interest Rates
Mortgage interest rates are influenced by the following factors:
**Central Bank Policies -** Interest rates are influenced by the UAE Central Bank’s monetary policy. Changes in home loan rates occur if the Central Bank adjusts its benchmark rates.
**Inflation Rates -** Higher inflation leads to higher interest rates as banking institutions aim to maintain their profit margins.
[](#)
**Economic Conditions -** In a strong economy, interest rates are usually lower due to increased trustworthiness towards borrowers, while economic instability can drive rates up.
**Credit Score -** Borrowers with good credit scores receive lower interest rates because they are considered lower risk, while those with poor scores face higher rates due to perceived higher risk.
**Loan Term -** Shorter loan terms generally have lower interest rates compared to longer terms as they represent reduced risk for banks over a shorter period.
**Loan-to-Value Ratio (LTV) -** A higher LTV ratio (loan amount relative to property value) often results in higher interest rates, as it indicates higher risk for the bank.
Let us see what loan seekers have to ask about mortgage interest rates in the UAE!
## Frequently Asked Questions
Q1. Are mortgages in Dubai free of interest?
No, home loan rates are not interest-free in Dubai. However, you can get low interest rates on your loan.
Q2. What is maximum tenure to repay a home loan in the UAE?
You have a maximum home loan repayment tenure of up to 25 years.
Q3. Which banks offer low interest rates on home loans in Dubai?
Some of the top banks offering low mortgage interest rates are:
* Dubai Islamic Bank
* RAKBANK
* Sharjah Islamic Bank
* Commercial Bank International, and more
Q4. How much interest rate does Emirates NBD apply on home loans?
Tentatively, Emirates NBD home loans’ interest rates start from 7.15% per annum (reducing rate).
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