Dubai’s New Mortgage Rules 2025: What Buyers Need to Know

January 31, 2025

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Dubai Market Trends & News

Dubai property market changes 2025 are shaping up to bring a significant shift for buyers using mortgage financing. Effective February 1, 2025, the Dubai Central Bank mortgage directive will require homebuyers to pay the Dubai Land Department (DLD) fee and brokerage fees upfront, as banks will no longer finance these costs as part of the mortgage.
This change aligns Dubai’s policies with international real estate markets like the UK and the USA. It also presents a golden opportunity for Dubai off-plan property investment, making it more attractive than ever for buyers looking for flexible payment plans and lower upfront costs.

What Are the New Mortgage Rules?

As of February 1, 2025, mortgage buyers in Dubai will need to cover the following fees separately:

  • 4% Dubai Land Department (DLD) registration fee
  • 2% Real estate brokerage commission
  • DLD Trustee Fee: AED 4,200
  • Mortgage Registration Fee: 0.25% of the loan amount
  • Title Deed Issuance Fee: AED 500

Previously, banks covered up to 80% of these costs as part of mortgage financing, effectively allowing buyers to spread these payments over the mortgage tenure. With this directive, buyers will now need to pay these costs upfront, in addition to their 20-30% property down payment.

What Are the New Mortgage Rules?

Why Is Dubai Implementing These Changes?

Dubai’s authorities are making this change to promote a more sustainable and stable real estate market. One key reason is to encourage responsible lending practices, ensuring buyers have the necessary financial capacity to maintain their mortgage without overextending themselves.

Another crucial objective is to prevent market overheating. By stabilizing property price growth and discouraging over-leveraging, the policy seeks to create a balanced and sustainable real estate sector.

Additionally, this shift will align Dubai’s mortgage system with global standards, such as those in the UK and the USA, where banks typically finance only fixed assets and not transaction-related costs.

“This is a strategic move to maintain the stability of the market and ensure a more financially responsible ecosystem,” said Farooq Syed, CEO of Springfield Properties.

Finally, this change is expected to boost the demand for off-plan properties. Many developers offer long-term, flexible payment plans, reducing the need for high upfront costs. This will make off-plan properties a more attractive investment option for buyers in 2025.

How Will This Impact Buyers?

Increased Initial Costs for Mortgage Buyers

For buyers looking at secondary market properties, this rule means they need more liquid funds at the time of purchase.
Example: If a property is priced at AED 1 million, a buyer would need an additional AED 60,000 in upfront costs, making affordability a key concern.

Rising Demand for Off-Plan Properties in Dubai

As a result, Dubai's off-plan property demand 2025 is expected to rise, with buyers gravitating towards developer-backed payment plans rather than mortgages.

Developers offer 5-10 year payment plans, allowing buyers to spread costs over time.
No DLD or broker fees upfront for many off-plan projects.

Investors looking for low-barrier entry options will find off-plan properties more attractive.

How Can Buyers Adapt to These Changes?

If you’re considering investing in Dubai property in 2025, here’s how you can navigate these changes effectively:

1. Plan Your Finances in Advance

Having sufficient liquid funds is crucial under the new Dubai mortgage rule February 2025. Buyers must prepare to cover DLD and brokerage fees upfront, as banks will no longer finance these costs. It is highly advisable to consult a mortgage advisor who can guide buyers through financial planning and mortgage options to ensure a smooth purchase process.

1. Plan Your Finances in Advance

2. Consider Off-Plan Properties

With the shift in mortgage financing, Dubai off-plan property investment is expected to rise. Developers now offer 0% interest payment plans, allowing buyers to distribute payments over several years. Additionally, off-plan properties often come with no immediate DLD or brokerage fee payments, making them a more accessible investment option.

3. Look for Developer Incentives

To attract buyers, developers are introducing Dubai property market changes 2025, including fee waivers and flexible payment plans. Some developers may absorb DLD fees, easing the upfront financial burden for investors. Additionally, many projects now feature post-handover payment plans, allowing buyers to settle payments after taking possession of the property.

FAQs

First-time buyers will need more savings upfront. However, they can still benefit from developer-backed payment plans that reduce immediate financial pressure.
 

No, cash buyers will not be impacted as they already pay these fees upfront. However, they may find more negotiating power in the secondary market due to reduced demand from mortgage buyers.
 

Some banks may introduce new personal loan options to assist buyers in covering these costs. Mortgage brokers can also help buyers find tailored financing solutions.
 

Yes, many developers already offer DLD waiver promotions and long-term payment plans, making off-plan purchases even more appealing in 2025.
 

As mortgage affordability decreases, demand for rental properties may rise, leading to higher rental yields for investors.
 

Unlikely. The move aligns Dubai with global real estate markets and promotes sustainable growth. Investors should plan for these regulations to remain in effect.

For more information, get in touch with us at Provident