How Interest rates will affect your Mortgages in Abu Dhabi, UAE

Owning any type of property in UAE is usually a great deal. Providing the best Mortgages in UAE is the key point. However, as you are searching for your property or dream home. So, how you plan the property purchasing journey is crucial & you have to think about, how you manage the monthly installment also. Let’s take a much closer view.

Mortgages available in the UAE

  • Fixed Rate: A fixed rate Mortgage product will have fixed interest rate for a period. It will be the same for a certain period of time. Following this fixed period, the interest rate may change or revert to a new rate.
  • Variable Rate: The Variable rate is reversible in sense. The rate may fluctuate within few months. This may depends on the market value. It’s LinkedIn to EIBOR.
  • Discounted Offer Rate:  This offers a provision of finances on standard variable for a short period of time. These type will be an introductory offer.

Of these products, Variable rate is playing an important role in the market, because it fluctuates according to the market values. And it is simply related to EIBOR.

Before begging the mortgage process, you can search for a mortgage advisor who will be an expert in Mortgage Consultation like Dar Al Tamleek. And ask about the current market rate, possibilities etc.

What is EIBOR?

EIBOR (Emirates Interbank Offered Rate), is the interest rate charged by the UAE banks for the interbank transactions. When one bank needs money, they will ask to another banks exceeds money. The second bank will get profit through this transaction. In order to manage the market, the second bank lends money to first bank depends on EIBOR. EIBOR has a direct influence of the Market. UAE Banks state their interest rates depends on this EIBOR.

Setting the Rate:

The EIBOR rate is setting the UAE Central Bank. The rate will publish on each day late morning. Until recently, it was calculated from the average rates of 10 Banks rates that ae submitted on daily base. They will remove the highest & lowest rate. And, will take the average of the remaining. That will considered as the rate.

But from the end of 2018, the banks changes the criteria and they started to use some financial benchmarks. They designed a new system for the calculation of the rates. It’s more transparent and easier on the market.

How the rates will affect the Mortgages?

As discussed, EIBOR is a benchmark for the lenders & banks. Depends on the EIBOR, the interest rate of your loan will fluctuates and also your monthly payment will change. If it’s high, the monthly payment will be high, if it’s low, likewise.

The Central Bank held its bench mark in a range of 2.25 and 2.5 percent revising down. This could provide an opportunity for those are getting a mortgages in UAE or searching the lowest mortgage rates in Abu Dhabi.

At Dar Al Tamleek, our experts are ensuing you the Best Mortgages in Abu Dhabi, UAE. Our consultants will help you to get the Best Mortgage rates in Abu Dhabi, UAE that is suitable for your circumstances.  We have access over 40 lenders in UAE to find the best product in UAE.