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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, how the Central Bank caps the exit fee, and the saving the move has to clear.

Updated

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 processing 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 loan: the exit fee, the Land Department's 0.25% for moving the 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, so on a large loan leaving costs less than most owners expect.

  • Equity release runs into the same loan-to-value ceiling as a purchase, roughly 75 to 80% of the value, and the bank sets that value with its own valuation.

  • Count the saving in dirhams over the years left on the loan. A small rate cut with four years to run may not cover the cost of the switch.

What the switch costs

Refinancing, which banks here usually call a buyout, replaces your mortgage with a new one: the new loan pays off the old and the charge on the title moves across. You can do it with another bank for better terms, or with your own if it would rather reprice than lose you.

Cost of moving a AED 1 million mortgage to another bank
CostRateAED
Exit fee, current bank1% or 10,000, the lesser10,000
Land Department charge0.25% of the mortgage2,500
Processing fee, new bankAbout 1% of the loan10,000
ValuationFlat3,000
Total to switchAbout 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 negotiable line. Banks want the business and will sometimes cut it, or fold it into the loan, to win a borrower with a clean record, so ask before you accept the first offer. The other three are fixed by the regulator, the Land Department and the valuer.

The capped exit fee

The penalty for leaving early doesn’t grow with the loan. The UAE Central Bank caps early settlement at 1% of the outstanding balance or AED 10,000, whichever is less, and the AED 10,000 ceiling is the part most owners haven’t read.

The exit fee at two balances
Outstanding balance1% of itExit fee
AED 1,000,00010,00010,000
AED 3,000,00030,00010,000

UAE Central Bank cap on early settlement: 1% of the outstanding balance or AED 10,000, whichever is less.

Owners with big balances often assume they’re the most locked in, and the arithmetic runs the other way. A borrower with AED 3 million outstanding pays the same AED 10,000 to leave as one with AED 1 million, and stands to save three times as much from the same movement in rate.

Borrowing against a rise

If the property is worth more than when you bought it, the gap between its value and what you still owe is equity, and a bank will lend against part of it. Top up the existing loan, or move to a new lender at a higher amount, and take the difference in cash.

Equity release on a unit valued at AED 2 million
LineAED
Bank's valuation2,000,000
Loan it might support, about 75 to 80%1,500,000 to 1,600,000
Still owed−900,000
Released before costs600,000 to 700,000

An illustration. Banks lend up to roughly 75 to 80% of the value their own valuer sets, the same ceiling as a purchase. The figure released is before costs.

  • The bank's valuation is the one that counts.

    The lender instructs its own valuer and lends against that figure, so a report that comes back lower than you hoped cuts the amount on offer.

  • The debt burden ratio still applies.

    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

  • Multiply the annual saving by the years left.

    A rate cut saves you money for as long as the loan runs. With eighteen years left, a small improvement adds up to a figure well above AED 25,500. With four years left, it may not cover the costs at all. Do this sum before anything else.

  • Ask your current bank first.

    Banks would generally rather reprice a loan than lose it. A retention offer carries no exit fee, no Land Department charge and no new valuation, so a smaller cut from your own lender can beat a larger one elsewhere once the AED 25,500 is counted.

  • 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's where you'll spend most of the loan.

  • Price released equity as borrowed money.

    Cash taken out against the property carries interest for the rest of the term and raises the monthly payment. It makes sense where it funds something that earns more than the rate, and it's expensive where it funds something that does not.

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's 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. 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. 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, and 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 rather than looking at the difference in percentage points. A quarter point on a small balance with four years to run won't cover AED 25,500 of costs. The same quarter point on a large balance with twenty years to run can cover it several times over.

Does the bank use my valuation or its own?

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, and the bank isn't bound by your research. A valuation that comes back lower than you hoped changes what you can borrow.

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