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UAE Mortgage Repayment Calculator

Free UAE mortgage calculator. Monthly repayments, total interest, and total repaid over the loan term, in AED.

Published

Written by PennyCompass Team

Monthly repayment and total interest on a UAE home loan.

Monthly repayment

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Total interest

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Total repaid

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Worked example

Take a buyer financing an AED 1,500,000 home loan at a fixed rate of 4.5% over the full 25-year Central Bank maximum. The monthly repayment uses the standard amortisation formula, where the rate is converted to a monthly figure of 0.375% and spread across 300 monthly payments. The repayment works out to about AED 8,337 a month. Over the whole term you repay roughly AED 2,501,246 in total, of which AED 1,001,246 is interest. The interest is larger than many buyers expect because a 25-year term keeps the balance high for a long time. Note that there is no personal income tax relief on mortgage interest in the UAE, so the interest is a pure cost.

Step Amount

How it is calculated

The monthly repayment is a fixed-rate amortising payment. The annual interest rate is divided by 12 to get a monthly rate, and the term in years is multiplied by 12 to get the number of payments. The standard annuity formula then finds the level payment that clears the balance to zero at the end of the term. Early payments are mostly interest because the balance is high, and later payments are mostly principal. The Central Bank of the UAE caps home loan terms at 25 years, so this tool limits the term to that maximum. A longer term lowers the monthly figure but raises total interest, while a shorter term does the opposite.

Frequently asked questions

What is the maximum mortgage term in the UAE?
The Central Bank of the UAE caps home loan terms at 25 years, and most lenders also require the loan to be fully repaid before the borrower turns 70. A longer term lowers the monthly repayment but increases the total interest paid. There is no personal income tax relief on mortgage interest in the UAE.
What is the maximum loan-to-value ratio for a UAE mortgage?
The UAE Central Bank sets loan-to-value limits by buyer type. Expatriates buying their first property can generally borrow up to 80% of the value for properties priced at or below AED 5 million, and up to 70% above that threshold. UAE nationals have slightly higher limits. Second and subsequent properties carry a lower cap, typically 65% for all buyers. These LTV rules mean a buyer must fund the remaining value from their own deposit before the loan is approved.
How does a shorter mortgage term affect the total interest paid?
Shortening the term significantly reduces total interest because the balance clears faster and accrues interest for fewer months. On a AED 1,500,000 loan at 4.5%, a 25-year term costs about AED 1,001,246 in total interest while a 15-year term cuts that to roughly AED 563,000, a saving of over AED 438,000. The trade-off is a higher monthly repayment, so borrowers need to confirm the shorter payment fits comfortably within the 50% debt-burden ratio UAE lenders typically apply.
Are UAE mortgage rates fixed or variable, and which should I choose?
Most UAE home loans start with a fixed rate for an initial period of one to five years, then revert to a variable rate linked to EIBOR (the Emirates Interbank Offered Rate) plus a margin. Fixed-rate periods give payment certainty and are useful when rates are rising. Variable rates can fall if EIBOR drops but add repayment uncertainty. A common strategy is to take a fixed introductory period and reassess refinancing options before it expires, because the penalty for early settlement usually expires at the end of the fixed window.

Related calculators

Affordability

Max property price.

Overpayment

Interest saved.

Sources

  1. Federal Tax Authority — VAT and Corporate Tax, Federal Tax Authority, United Arab Emirates
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