Text size:

  • Small
  • Normal
  • Large
Dubai Islamic Bank will provide Emiratis in Dubai with financing up to 100 per cent of the value of properties up to Dh2 million for tenures of 25 years. Jumana El Heloueh / Reuters
Dubai Islamic Bank will provide Emiratis in Dubai with financing up to 100 per cent of the value of properties up to Dh2 million for tenures of 25 years. Jumana El Heloueh / Reuters

DIB offers Emiratis 100% mortgages

Dubai Islamic Bank and the Mohammed Bin Rashid Housing Establishment have signed an agreement to finance up to the full value of UAE nationals' mortgages on new property purchases.

Dubai Islamic Bank and the Mohammed Bin Rashid Housing Establishment have signed an agreement to finance up to the full value of Emiratis' mortgages on new property purchases.

The bank said it would provide Emiratis in Dubai with financing up to 100 per cent of the value of properties up to Dh2 million for tenures of 25 years.

The Mohammed Bin Rashid Housing Establishment provides land grants and financing to nationals in Dubai for the purchase of subsidised housing.

After Dubai's property crash, banks adhered to voluntary constraints on the amount of financing they provided to mortgage customers. A higher loan-to-value ratio amplifies risk for both the bank and customer if property values fall sharply.

But Dubai Islamic Bank's conservative underwriting practices and the stringent screening criteria of the Mohammed Bin Rashid Housing Establishment meant that the agreement would lower the risk of mortgage lending for the bank, said Sam Wani, the general manager of Independent Finance, a mortgage consultancy. Offers to fully finance property purchases with mortgages were not uncommon, but limited in practice, he added.

Last year, Emirates Islamic Bank said it would offer 100 per cent financing to nationals. Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank have offered 100 per cent financing for properties on Saadiyat Island.

Few 100 per cent mortgages, if any, have been signed since the financial crisis, Mr Wani said: "You can rest assured that clients getting this mortgage would be very few in number."

The UAE Government has become increasingly concerned about financial literacy among Emiratis as banks warn that regularly bailing out indebted citizens encourages them to take higher risks.

In December, the Central Bank drew up proposals for a cap on mortgages, under which nationals could fund no more than 70 per cent of first-home purchases via mortgage loans and 60 per cent of any subsequent buys. The rules remain under discussion at the Central Bank.

* Gregor Stuart Hunter

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National