A mortgage buyout in Dubai (also called a balance transfer, loan takeover, or mortgage transfer) is one of the fastest ways to reduce your monthly installment, lock a better rate, or release equity—without selling your home.
But refinancing your home isn’t just “switching banks.” It’s a process with bank approvals, valuation, settlement steps, and Dubai Land Department (DLD) registration. This guide breaks it all down in a clear, practical way—so you can make the decision based on numbers, not marketing.
What does “mortgage buyout” mean in Dubai?
A mortgage buyout happens when a new bank pays off your existing home loan and replaces it with a new facility under updated terms (rate, tenure, type). This is why it’s often called a balance transfer or loan takeover.
You typically refinance mortgage in Dubai for one (or more) of these reasons:
- Lower interest/profit rate → reduced monthly payments
- Switch from variable to fixed (or vice versa)
- Change the tenure (shorter to save interest, longer to reduce instalments)
- Equity release (cash-out) for renovations, investment, or liquidity needs
- Consolidate costs into a cleaner repayment plan (when allowed by the lender)
Refinance vs Remortgage vs Mortgage Transfer (Dubai terms explained)
People use different terms, but they usually mean:
- Refinance mortgage: Replace your current loan with a new loan (same or different bank).
- Remortgage Dubai: Common UK-style wording; in Dubai it generally means refinance/switch.
- Mortgage transfer / loan takeover: New lender takes over your outstanding balance; DLD updates the mortgage registration accordingly. DLD has formal “mortgage transfer” and “mortgage registration” processes for this.
The real cost of refinancing in Dubai
Refinancing can save money, but only if the savings exceed the costs. Here are the big cost buckets you should plan for:
1) Early settlement / buyout fee charged by your current bank
Many UAE mortgage lenders charge an early settlement fee when you close the loan early (including when another bank buys it out). Key Facts Statements commonly show this as 1% of the outstanding amount, capped (e.g., AED 10,500 in one bank’s KFS).
Tip: Ask your current bank for a liability letter showing the exact outstanding balance and applicable settlement charges.
2) DLD mortgage registration fee (for the new mortgage)
DLD fees are a major part of the refinance cost.
For mortgage registration, DLD shows:
- 0.25% of the mortgage value
- Plus fixed fees (e.g., title deed issuance, knowledge/innovation fees)
- Plus service partner/trustee fees (commonly AED 4,000 + VAT; higher for Oqood/off-plan)
3) DLD mortgage release (removal) fee (for the old mortgage)
When your old loan is settled, the old mortgage must be released/removed at DLD.
DLD’s mortgage release service lists:
- AED 1,000 mortgage removal fee
- Plus fixed fees (title deed issuance, knowledge/innovation)
- Plus service partner fees (e.g., AED 300 + VAT)
4) Property valuation and bank processing fees
Most banks require a valuation before final approval. Some banks publish their valuation and processing fees in Key Facts Statements and fee schedules (these vary).
Quick break-even test (so you don’t refinance “just because”)
Before you remortgage Dubai, do this simple check:
- Total refinance cost
= early settlement fee + DLD registration + DLD release + valuation + bank fees - Monthly savings
= (current monthly payment – new monthly payment) - Break-even months
= Total cost ÷ Monthly savings
If break-even is 12–24 months or less, refinancing is often worth serious consideration (depending on your plans and stability). If it’s much longer, you may be refinancing for the wrong reason.
Eligibility basics (what banks look at in Dubai)
Every lender has its own policy, but most will review:
- Income and employment type (salaried vs self-employed)
- Credit history / bureau score
- Property type and location
- Current outstanding balance and payment history
- Debt burden ratios and affordability
- Loan-to-value (LTV) limits (your equity matters)
Dubai down payment / LTV rules are influenced by UAE mortgage regulations and market practice. A common reference point for expats is that minimum down payment can start around 20% for properties under AED 5 million, with higher equity required for higher-value properties or additional properties.
Also note: UAE mortgage rules include a commonly referenced maximum tenor of 25 years.
Step-by-step: How a mortgage buyout (balance transfer) works in Dubai
Here’s the process most homeowners follow:
Step 1: Get your liability letter (from your current bank)
This confirms:
- Outstanding balance
- Settlement amount
- Validity period (liability letters can expire)
Step 2: Compare offers and secure pre-approval
You can apply directly to a bank or through a broker who compares multiple lenders.
Step 3: Valuation is ordered by the new bank
The valuation helps determine:
- Property market value
- Maximum eligible loan amount
Whether you can do equity release Dubai (cash-out) or not
Step 4: Final offer letter + facility documents
Once approved, you receive the final offer and sign.
Step 5: Settlement (loan takeover) happens
The new bank arranges payment to close your old mortgage.
Step 6: DLD mortgage release (remove old mortgage)
The old mortgage is removed once the old bank confirms settlement.
Step 7: DLD mortgage registration (register new mortgage)
The new mortgage is registered in the online system or trustee centers, and it supports first or second degree mortgages.
Documents checklist (Dubai mortgage refinance)
Exact lists vary, but you should expect:
From DLD (mortgage registration / transfer)
You may need items like:
- Letter from the mortgagee bank
- Certified mortgage contracts
- Emirates ID for residents (or passport for non-resident foreigners)
- Developer E-NOC for certain provisional/off-plan situations
From the bank (typical)
Banks commonly request:
- Emirates ID, passport, visa
- Salary certificate (or trade license/company docs for self-employed)
- Recent bank statements
Equity release mortgage Dubai (cash-out refinance)
Option A: Equity release Dubai (cash-out refinance)
If your property value increased—or you’ve paid down a good chunk—you may refinance the mortgage with a higher amount and take the difference as cash. This is often called equity release mortgage Dubai or cash-out refinance.
Use-cases homeowners typically consider:
- Renovations that increase rental yield
- Building an emergency fund
- Funding another down payment (if allowed by the bank and your affordability)
Option B: Second mortgage Dubai (second-degree mortgage)
A “second mortgage” usually means an additional facility secured against the same property behind the first mortgage. DLD supports registration of a mortgage as first or second degree.
Reality check: Not all banks are comfortable with second-degree structures, and the numbers must fit strict LTV and affordability limits.
Common mistakes that cost homeowners money
Avoid these most common mistakes before applying:
- Refinancing for a tiny rate drop without calculating break-even
- Ignoring DLD fees (they can be significant)
- Not checking if the new rate is fixed or variable (and how it resets)
- Assuming equity release is guaranteed—valuation can change everything
- Delaying documents (mortgage timelines often depend on how fast paperwork is completed)
Mortgage processes in the UAE are often described as taking a few weeks, depending on valuation and document readiness.
Final Words:
If you want a refinance plan that’s based on your real numbers—not a generic rate quote—Credit Link can help you compare options and manage the process end-to-end (resident and non-resident mortgage solutions are part of their services).
Get a free quote / consultation:
- Call: +971 4 333 9165
- Email: info@creditlink.ae
Ask for a Refinance Mortgage (Buyout) Review, and request:
- Break-even analysis
- Total cost estimate (bank + DLD)
- Best options for fixed vs variable
- Equity release feasibility (if applicable)
FAQs:
1) What is a mortgage buyout in Dubai?
A mortgage buyout (balance transfer/loan takeover) is when a new bank settles your existing home loan and issues a new mortgage.
2) When should I refinance my mortgage in Dubai?
Refinance when the monthly savings recover all costs within a reasonable time (often 12–24 months) or you need better terms and cash flow.
3) What costs are involved in a remortgage in Dubai?
Expect early settlement charges, DLD mortgage release/registration fees, valuation fees, and possible bank processing fees.
4) Can I get equity release Dubai while refinancing your home?
Yes—if valuation, LTV limits, and affordability allow, you can refinance for a higher amount and take the difference as cash.
5) How long does a mortgage transfer (loan takeover) take in Dubai?
Many cases complete in a few weeks, but timelines depend on valuation speed, document readiness, and bank/DLD processing.
