Dubai’s New Mortgage Rules 2025: What Buyers Need to Know
Dubai Real Estate Market in 2025: Dubai’s New Major Mortgage Changes and Investment Opportunities
The Dubai property market is set for a significant shift in 2025, particularly for buyers using mortgage financing. Starting February 1, 2025, the Dubai Central Bank’s new directive will require homebuyers to pay key transaction fees upfront, as banks will no longer finance these costs as part of the mortgage.
This regulatory update aligns Dubai’s real estate policies with global markets such as the UK and the USA. While this change may increase initial costs for mortgage buyers, it presents a lucrative opportunity for those considering Dubai’s off-plan property market, which offers flexible payment plans and reduced upfront financial commitments.
Understanding the New Mortgage Rules
Dubai’s New Mortgage Rules Effective February 1, 2025, mortgage buyers will need to pay the following fees separately:
*Dubai Land Department (DLD) Registration Fee: 4% of the property price
*Real Estate Brokerage Commission: 2% of the property price
*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, making it easier for buyers to distribute these expenses over the mortgage tenure. Now, buyers will need to pay these fees upfront in addition to their 20-30% down payment.
Why Are These Changes Being Implemented?
Dubai’s real estate market is evolving to ensure long-term sustainability. Here are the key reasons behind this policy shift:
Encouraging Responsible Lending – By requiring buyers to cover transaction fees upfront, authorities aim to promote financial responsibility and ensure buyers have the capacity to manage mortgage payments without overextending themselves.
Preventing Market Overheating – This policy seeks to control excessive speculation and stabilize property price growth, ensuring a balanced market for buyers and investors.
Aligning with Global Standards – International real estate markets, including the UK and USA, typically require buyers to pay transaction-related fees separately, and Dubai is now following suit to enhance market credibility.
Boosting Off-Plan Property Demand – Since off-plan properties often come with flexible payment plans and lower initial costs, this shift will make them a more attractive investment choice in Dubai’s real estate sector.
How Will This Impact Property Buyers?
Higher Initial Costs for Mortgage Buyers
Mortgage buyers in Dubai will need more liquid funds to cover transaction costs at the time of purchase. For example, purchasing a property worth AED 1 million will now require an additional AED 60,000 in upfront fees, increasing the total initial financial requirement.
Growing Demand for Off-Plan Properties
With mortgage-related costs rising, many buyers are expected to shift toward off-plan properties in Dubai. Key benefits include:
Developer-backed flexible payment plans (5-10 years)
No immediate DLD or brokerage fee payments on many projects
Lower upfront financial burden, making investment more accessible
How Buyers Can Adapt to the New Market Dynamics
- Plan Your Finances in Advance
Buyers must account for transaction fees in their budget, as banks will no longer cover them. Consulting a mortgage advisor can help navigate financing options and ensure a smoother purchase process.
- Consider Off-Plan Investments
With off-plan properties becoming a preferred choice, buyers can take advantage of 0% interest payment plans, allowing them to spread costs over several years. Additionally, many off-plan developments do not require upfront DLD or brokerage fee payments, making them an attractive option.
- Explore Developer Incentives
To attract buyers, developers are rolling out incentives such as fee waivers and extended payment plans. Some developers may absorb DLD fees, reducing the initial financial burden. Post-handover payment plans are also becoming more common, allowing buyers to settle payments after property handover.
Right Hand Reality: Your Trusted Partner in Dubai Real Estate
At Right Hand Reality, we help buyers navigate Dubai’s evolving real estate landscape. Whether you’re looking for Apartments for sale and rent in Dubai and UAE, a house for sale in dubai, or a house for rent in dubai, our expert team provides tailored guidance to ensure you make the right investment decision.
Explore Dubai’s real estate opportunities today. Contact Right Hand Realty to find the perfect property for your needs. https://righthandreality.com/contact-us/
