Eligibility for Mortgage Refinancing in UAE

Eligibility for Mortgage Refinancing in UAE

Mortgage refinancing in the UAE is when you change your current home loan to a new one. This can help you get a lower interest rate or change how long you have to repay the loan. It’s an excellent way to save money or make your monthly payments smaller if your financial situation or the economy changes.


Navigating the field of mortgage refinancing in the UAE may seem challenging. However, with the correct data and guidance, owners can make informed choices that best suit their financial desires. Whether you’re trying to lower your monthly payments, switch from a variable-rate loan to a fixed-rate mortgage, or tap into your home equity, knowing the eligibility criteria is the first step. Here, we explain the essentials of loan refinance eligibility within the UAE, providing insight and advice to help you through the technicalities.

What Does It Take to Qualify for Mortgage Refinancing?

Eligibility for mortgage refinancing in the UAE involves several criteria that homeowners must meet to qualify for a new loan that replaces their existing mortgage. Here’s what you need to know about qualifying for mortgage refinancing in the UAE:

  • Current Mortgage Status: To consider refinancing your mortgage in the UAE, you must already have a mortgage and a history of making timely payments. Lenders often want you to have been paying your original mortgage for a while before they’ll let you refinance. This shows them you’re reliable and can manage your mortgage payments effectively.
  • Credit Score and Financial History: Your credit score and financial history are pivotal in your ability to refinance your mortgage. Lenders will thoroughly examine your credit score and financial history to gauge how risky it would be to lend to you. You’re more likely to get approved for refinancing if you have a solid financial background, with few debts and a steady income. An excellent financial history suggests you can manage your debts responsibly.
  • Equity in the Property: Equity in your property is also crucial for refinancing. Equity is the part of your property you own, meaning your mortgage does not cover it. Most lenders require you to have at least 20% equity in your home to be eligible for refinancing. This requirement is in place to protect the lender’s investment, ensuring they have a safety net in case of default.
  • Income and Employment Stability: Stable income and employment are essential for refinancing. Lenders will verify your income and employment history to ensure you have the financial stability to afford the new mortgage payments. This step is crucial because it reassures the lender that you have a reliable source of income to cover your mortgage obligations.

  • Debt-to-Income Ratio (DTI): Your Debt-to-Income Ratio (DTI) is a critical factor in determining your eligibility for refinancing. It compares your monthly debt payments to your gross monthly income. A lower DTI ratio indicates a good balance between your debts and income, making you a more attractive candidate for refinancing. Lenders prefer borrowers with lower DTI ratios because it suggests they are less likely to default on their loans.
  • Property Valuation: A current valuation of your property may be required for refinancing. The lender will arrange a professional appraisal to determine your home’s market value. This appraisal helps the lender decide how much they are willing to lend you based on the current value of your property.
  • Type of Property: The type of property you own can also influence your eligibility for refinancing. Some lenders restrict refinancing for specific properties or locations within the UAE. This is because different types of properties and locations carry different levels of risk for the lender.
  • Existing Loan Terms: The terms of your existing loan can impact your refinancing options. Some mortgages come with penalties for paying off your loan early, which could negate the financial benefits of refinancing. It’s important to understand these terms before proceeding with refinancing.
  • Lender’s Refinancing Requirements: Each UAE lender has its requirements. These can include minimum and maximum loan amounts, loan-to-value (LTV) ratios, and specific documentation needed to process your application. Understanding these requirements is crucial for a successful refinancing application.

How Can You Benefit from Refinancing Your Mortgage?

Here’s how you may take advantage of refinancing your mortgage:

  • Reduce Your Monthly Payments: By securing a lower interest price, you can lower the quantity you pay every month, liberating up funds for different wishes or financial savings.

  • Stabilise Your Payments: Switching from a variable interest fee to a set-rate mortgage ensures your payments remain steady, defending you towards destiny charges will increase.

  • Access Home Equity: Refinancing can help you tap into the equity built up in your home, offering coins for renovations, education, or paying off excessive interest debts.

  • Shorten Your Mortgage Term: You can opt for a shorter loan term to pay off your mortgage faster, probably saving hundreds in interest over the existence of the loan.

  • Consolidate Debt: By using the budget from refinancing to pay off excessive interest money owed, you can consolidate your debts into one lower-interest payment, simplifying your budget and reducing ordinary interest prices.
Mortgage Refinancing

What Are the Costs Associated with Mortgage Refinancing?

Understanding the costs involved in refinancing is crucial. Here’s what to expect:

  • Closing Costs: These are fees paid at the closing of a real estate transaction, including appraisal fees, attorney fees, and other administrative expenses. These costs vary but can significantly impact the overall affordability of refinancing.

  • Settlement Fees: This encompasses a range of charges incurred during the refinancing process, such as title searches and insurance, which ensure the borrower has clear ownership to refinance the property.

  • Processing Fees: Charged by the lender or mortgage broker, these fees cover the mortgage application’s cost, including credit checks and employment verification.

  • Property Valuation Fee: An appraisal fee is required to determine the current value of your property. This assessment ensures the lender that the property’s value supports the loan amount.

  • Early Repayment Charges: If you’re paying off your original mortgage early, your current lender may charge a penalty. These fees can be different for each lender’s policies and mortgage agreement.

What Should You Consider Before Refinancing?

Before making the final decision to refinance, consider the following points:


  • Financial goals: Identify your primary refinancing goal, such as reducing monthly payments or changing loan type.


  • Benefits: Make sure the new bill is lower than yours to save capital over time.


  • Closing costs and expenses: Determine whether long-term savings justify additional upfront costs for refinancing.


  • Break-Even Point: Calculate how long it will take for the reinvestment savings to exceed the initial cost.


  • Future Plans: Consider how long you intend to live in your home. Cashbacks are helpful if you stay long enough to reach the breakeven point.

Navigating mortgage refinancing in Dubai requires careful consideration of your financial goals, interest rates, and long-term plans. eMortgage simplifies this journey, offering expert guidance to align refinancing options with your objectives. 


Whether aiming to lower monthly payments, change loan terms, or access home equity, we help you find competitive rates and optimal solutions. Our personalised approach ensures you make informed decisions, maximising your financial benefits. Trust eMortgage to easily navigate you through the refinancing process, turning complex decisions into straightforward, beneficial outcomes.