Tighter Credit and Dubai Mortgages

Mortgage lending has played a growing role in Dubai's property market. As more banks began lending to foreign buyers, financing became easier to obtain, supporting demand. Now, with international credit markets under strain, some banks are becoming more selective: requiring larger deposits, stricter income checks or charging higher rates.

What tighter credit looks like

• Lower loan-to-value ratios: buyers need larger deposits.
• Stricter checks: more scrutiny of income and existing debts.
• Higher rates: borrowing becomes more expensive.
• Fewer products: some lenders withdraw from certain segments.

Effects on buyers

Buyers who depend on mortgages may find it harder to complete purchases, particularly of off-plan properties due for handover. Those who planned to finance final payments with loans should confirm their arrangements early.

Effects on sellers and prices

When fewer buyers can borrow, demand falls, particularly at the margins of the market. Sellers may need to accept longer sale times or lower prices. Properties suited to cash buyers, such as prime homes, may be less affected.

Planning ahead

Buyers with upcoming completions should secure financing in advance and consider alternative sources of funds. Investors should avoid assuming that refinancing will always be available on favourable terms.

The role of developers

Some developers may offer payment plans or financing to support sales. Buyers should evaluate these offers carefully, including their total cost and terms.

Our view

Tighter credit is a natural response to global conditions. We advise clients to plan their financing early, keep borrowing modest and focus on properties that will remain attractive to buyers who do not depend on mortgages.