The UAE Central Bank has issued long awaited new rules governing bank lending to property buyers which shall come into force a month after they are published in the Official Gazette.
As per the new rules, home loans to expatriates shall be restricted to 75 percent of a property’s value whereas for UAE nationals it shall be restricted to 80 percent of a property’s value for a first investment worth less than AED 5 million. For properties worth more than AED 5 million, home loans for first time expatriates shall be restricted to 65 percent of the property’s value whereas for UAE nationals it shall be restricted to 70 per cent.
For second and subsequent property purchases, expatriates shall only be allowed to borrow up to 60 per cent of a property’s value regardless of its worth and UAE nationals shall be allowed to borrow up to 65 percent of the property’s worth.
For off plan property, the buyer shall only be able to borrow 50 per cent of the value of the property regardless of purpose, value or nationality.
The term of the loan shall be limited to a maximum of 25 years and the maximum age at the time of the last repayment should 65 years for expatriates and 70 years for UAE nationals.