Switching your mortgage, and what it costs to move.
A lower rate is only worth having if it beats the fees to get there. This works out the monthly saving, the cost of the move, and the month it starts paying you back.
Moving a Dubai mortgage to a better rate costs four things: an exit fee capped at 1% of the outstanding balance or AED 10,000, whichever is less, a Land Department charge of 0.25% to move the mortgage, a processing fee of around 1% at the new bank, and a valuation of about AED 3,000. The question is whether the lower rate earns that back before you sell or settle.
AED 546 a month less to pay, against AED 25,650 to move the loan.
The exit fee is the lesser of 1% of the outstanding balance and AED 10,000, which is the figure most owners overestimate. On a large loan it is capped, so switching is cheaper than it sounds. The new bank decides what it will lend against its own valuation, not against what you believe the property is worth.
What moving a loan costs
| Charge | Basis | AED |
|---|---|---|
| Early settlement, old bank | 1% or 10,000, the lesser | 10,000 |
| Land Department | 0.25% of the balance | 2,500 |
| New bank processing | About 1% | 10,000 |
| Valuation | About 3,000 + VAT | 3,150 |
| Total to switch | 25,650 |
Rates current at June 2026. Bank processing fees vary and are often negotiable. The exit fee cap is set by the UAE Central Bank. Confirm each figure with your own lenders.
Before you apply
Ask your own bank first.
Banks would rather reprice a loan than lose it. A call asking what they will do to keep you sometimes produces most of the saving with none of the fees, and it costs nothing to find out.
Compare the rate after the fixed period, not the headline.
A two-year fixed rate that reverts to a high variable margin can cost more across the remaining term than a slightly higher rate that holds. Ask what the reversion rate is and run the calculation on that.
Know how long you are keeping the property.
The payback figure is the whole decision. If you might sell inside it, switching loses money however good the rate looks, because the fees are paid on day one and the saving arrives monthly.
Negotiate the processing fee.
The 1% processing fee is the most movable number in the list. Banks compete for balances that are already performing, and a waived or halved fee changes the payback period materially.
Rates and fees current at June 2026 and indicative. Processing fees, valuation charges and lending limits vary by bank. General information, not financial advice. Confirm the figures with your current and prospective lenders before you commit.
Questions
- What does it cost to switch a mortgage in Dubai?
- Four charges, and they are more predictable than most owners expect. The exit fee from your current bank is capped at 1% of the outstanding balance or AED 10,000, whichever is less. The Land Department charges 0.25% of the balance to move the charge. The new bank takes a processing fee of around 1%. A valuation runs about AED 3,000 plus VAT.
- Why is the exit fee capped so low?
- The UAE Central Bank caps early settlement at the lesser of 1% and AED 10,000. On a AED 800,000 loan that is AED 8,000. On a AED 4 million loan it is still AED 10,000, so large balances are proportionally much cheaper to move. Owners with big loans often assume the opposite and never look.
- How much of a rate drop makes switching worth it?
- It depends on the balance and the years left, which is what the calculator is for. As a rough shape, on a AED 1 million balance with twenty years to run, a one-point drop saves several hundred dirhams a month and pays back the switching cost inside a couple of years. On a small balance with five years left, the same drop may never cover the fees.
- Can I release equity at the same time?
- Usually yes. If the property has risen in value you can refinance to a larger loan and take the difference in cash, subject to the lender's loan-to-value limit, which sits around 75 to 80% of value. The bank's own valuation decides the ceiling, not your estimate of what the property is worth.
- Does switching restart the mortgage term?
- It can, and that is worth watching. Taking a lower rate over a longer term reduces the monthly payment while increasing the total interest paid. Keep the remaining term the same if the aim is to save money rather than to free up cash flow.
- Will the new bank lend me the same amount?
- Not necessarily. The new lender applies its own loan-to-value cap and the 50% debt burden ratio to your current income, not the income you had when the original loan was written. If your circumstances have changed, check what they will offer before you pay for a valuation.
Mulki tracks the loan against the value, so you know when to move.
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