Banks in the UAE are witnessing growing competition in offering mortgage financing deals for citizens and residents. These offers include flexible repayment start periods, up to 90 days for new mortgage financing and 180 days for transferring an existing mortgage. For residents, the repayment start period extends to 60 days for new financing and 120 days for existing loan transfers.

These banks also offer a full exemption from processing, early settlement, and valuation fees.

What Are These Bank Offers Aiming For?

Through these offers, banks aim to expand their market share and boost profits before the end of the fourth quarter, with these promotions expected to continue until the end of December.

Meanwhile, other banks have launched competitive offers to attract customers, including reducing interest rates to between 3.74% and 4.25% (declining), compared to 4% to 4.49% at the beginning of 2025.

Why Are Banks Offering These Deals?

Buying residential units has become a common trend among both citizens and residents in the UAE, as an alternative to paying high rents. This growing demand encourages developers to launch projects that meet the needs of different segments of buyers, prompting banks to respond with attractive mortgage financing offers.

A mortgage loan is usually a long-term commitment, often lasting more than 15 years and sometimes extending up to 20 years. Therefore, it is important for clients to fully understand all details related to payment postponements and avoid rushing into transferring their existing loans without carefully reviewing the interest already paid, which they may not benefit from after switching to another bank. This is because, in most cases, interest rates are declining, meaning that banks collect a larger portion of the interest during the early repayment period.

Central Bank Lowers Interest Rates for the Second Month in a Row

The Central Bank of the UAE has lowered the base rate on overnight deposit facilities by 25 basis points, from 4.15% to 3.90%. This marks the second straight rate cut in two months at the same rate, with the first in September.

This decision follows the U.S. Federal Reserve’s announcement in its latest meeting to cut the interest rate on reserve balances by 25 basis points.

The Central Bank has decided to maintain the rate charged on short-term borrowing from the Central Bank through all existing credit facilities at 50 basis points above the base rate.

The base rate, which is linked to the interest rate on reserve balances set by the U.S. Federal Reserve, defines the overall direction of monetary policy and serves as the minimum effective interest rate for overnight money market rates in the country.