Refinancing a Dubai mortgage, and what the switch costs.
Moving a loan to a better rate, or borrowing against a property that has risen in value. What each step costs, the fee cap most owners get wrong, and the saving the move has to clear.
Switching a Dubai mortgage to a lower rate costs roughly AED 25,500 on a AED 1 million loan. Most of that is the exit fee from your current bank and the arrangement fee at the new one. Before you move, work out what the lower rate saves you across the years you have left, and check that it clears that figure with room to spare.
In short
Switching costs about AED 25,500 on a AED 1 million outstanding loan: the exit fee, the Land Department charge, the new bank's processing fee and a valuation.
The early settlement fee is capped at 1% of the outstanding balance or AED 10,000, whichever is less. On a large loan that cap makes leaving much cheaper than owners expect.
The Dubai Land Department charges 0.25% of the mortgage value to move the charge from one bank to another.
Equity release runs up against the same loan-to-value ceiling as a purchase, so you can borrow up to roughly 75 to 80% of what the property is worth.
The bank's own valuation sets that ceiling. What you think the property is worth does not come into it.
What the switch costs
Refinancing, which banks here usually call a buyout, means replacing your current mortgage with a new one. The new loan pays off the old one and the charge on the title moves across. You can do it with a different bank chasing better terms, or with your existing bank if they would rather keep you than lose you.
Four charges fall due. Below is the full list on a loan with AED 1 million still outstanding.
| Cost | Rate | AED |
|---|---|---|
| Exit fee, current bank | 1% or 10,000, the lesser | 10,000 |
| Land Department charge | 0.25% of the mortgage | 2,500 |
| Processing fee, new bank | About 1% of the loan | 10,000 |
| Valuation | Flat | 3,000 |
| Total to switch | About 2.55% | 25,500 |
Early settlement capped by the UAE Central Bank at 1% of the outstanding balance or AED 10,000, whichever is less. Dubai Land Department charge at 0.25% of the mortgage value. New bank processing fee at roughly 1% of the loan, which varies by lender and is often negotiable. Valuation around AED 3,000. Figures current at September 2026.
The processing fee is the soft line. Banks want the business and will sometimes cut it, or fold it into the loan, to win a borrower with a clean record. It is worth asking before you accept the first offer. The other three are fixed by the regulator, the Land Department and the valuer, and no amount of negotiating moves them.
The cap owners get wrong
Most people assume the penalty for leaving a mortgage early scales with the size of the loan. It does not. The UAE Central Bank caps early settlement at 1% of the outstanding balance or AED 10,000, whichever is less, and that second clause is the one worth reading twice.
On a AED 1 million balance the two figures land in the same place, so the fee is AED 10,000. On a AED 3 million balance, 1% would come to AED 30,000, but the cap holds it at AED 10,000. The larger your mortgage, the smaller the exit fee looks in proportion to what a better rate would save you.
This changes who should be looking at a switch. Owners with big balances often assume they are the most locked in, when the arithmetic works the other way round. A borrower with AED 3 million outstanding pays the same AED 10,000 to leave as a borrower with AED 1 million, and stands to save three times as much from the same movement in rate.
Borrowing against a property that has risen
Equity release is the other reason to refinance. If the property is worth more than it was when you bought, the gap between the current value and what you still owe is equity, and a bank will lend against part of it. You can top up the existing loan or move to a new lender at a higher amount and take the difference in cash.
The ceiling is the same loan-to-value cap that applies to a purchase, so plan on being able to borrow up to roughly 75 to 80% of the property’s value. Take that figure, subtract the outstanding balance, and what remains is broadly what is available. A unit valued at AED 2 million with AED 900,000 still owed might support a loan of AED 1.5 million, releasing AED 600,000 before costs.
Two things then decide whether you get it. The first is the bank’s valuation, which is the only one that counts. The second is the debt burden ratio, because a larger loan means a larger monthly payment, and total repayments still have to sit inside half your monthly income. The mortgage calculator on this site works both limits out together.
Before you move
Count the years, not the percentage points.
A rate cut saves you money for as long as the loan runs. With eighteen years left, a small improvement compounds into a figure that dwarfs AED 25,500. With four years left, it may not cover the costs at all. Multiply the annual saving by the remaining term before anything else.
Ask your current bank first.
Banks would generally rather reprice a loan than lose it. A retention offer costs you no exit fee, no Land Department charge and no new valuation, so even a smaller rate cut from your existing lender can beat a larger one elsewhere once the AED 25,500 is in the comparison.
Check what happens after the fixed period.
A headline rate that lasts two years and then reverts to a variable margin is a different product from one that holds for five. Ask what the rate becomes when the fixed term ends, because that is where you will spend most of the loan.
Treat released equity as a loan, not a windfall.
Money taken out against the property carries interest for the rest of the term and raises the monthly payment. It can be sensible where it funds something that earns more than the rate, and expensive where it funds something that does not. Price it against what the cash will do.
General information for property owners, current at September 2026, and not financial advice. Bank fees, rates and lending limits vary by lender and applicant. Confirm the figures for your own loan with your bank before you act on anything here.
Questions
- What does it cost to switch my mortgage to another bank in Dubai?
- On a AED 1 million outstanding balance, about AED 25,500. That is the exit fee from your current bank, the Land Department charge for moving the mortgage, the new bank's processing fee and a valuation. The exact figures vary by lender, and the processing fee is the one worth negotiating, because banks compete for the business and sometimes waive part of it.
- How much is the early settlement fee in the UAE?
- The Central Bank caps it at 1% of the outstanding balance or AED 10,000, whichever is less. The second half of that sentence does the work. On a AED 1 million loan the two figures are the same, so you pay AED 10,000. On a AED 3 million loan, 1% would be AED 30,000, but the cap holds it at AED 10,000.
- Can I release equity from a Dubai property that has gone up in value?
- Yes, within the usual lending limits. You either top up the loan with your existing bank or refinance to a new one at a higher amount, and take the difference in cash. Banks lend up to roughly 75 to 80% of the property's value, so the amount available is that ceiling less whatever you still owe.
- How much equity can I take out?
- Take 75 to 80% of the current value, then subtract the outstanding balance. A property valued at AED 2 million with AED 900,000 left on the mortgage might support a loan of AED 1.5 million to AED 1.6 million, which would release AED 600,000 to AED 700,000 before costs. Your income still has to carry the larger repayment, so the debt burden ratio can bring that figure down.
- Is it worth switching for a small difference in rate?
- Work out the saving in dirhams over the years you have left, not the difference in percentage points. A quarter point on a small balance with four years to run will not cover AED 25,500 of costs. The same quarter point on a large balance with twenty years to run is a different proposition. The term remaining matters as much as the rate.
- Does the bank use my valuation or its own?
- Its own, and only its own. The lender instructs a valuer, pays around AED 3,000 for the report and lends against that figure. Recent sales in your building are a reasonable guide to what the report will say, but the bank is not bound by your research, and a valuation that comes back lower than you hoped changes what you can borrow.
Mulki keeps the loan, the value and the equity on every unit in one place.
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