UAE mortgage rates in 2026 are entering a turning point. After years of rising borrowing costs, home loan interest rates are beginning to stabilize, creating new opportunities for buyers, investors, and homeowners looking to refinance.
This guide breaks down the latest UAE mortgage rates, explains what is driving them, and shows you exactly how to secure the best mortgage rates in UAE with confidence.
What’s driving mortgage rates in UAE in 2026
UAE mortgage rates are heavily influenced by UAE monetary policy, which is closely linked to the US rate environment because the AED is pegged to the USD. In the Central Bank of the UAE (CBUAE) press release, the Base Rate (ODF)was cut 25 bps from 3.90% to 3.65% (effective 11 December 2025), and the CBUAE explicitly notes the Base Rate is anchored to the US Federal Reserve’s IORB.
That matters because most variable home loan interest rates (and many Islamic “profit rates”) in the UAE are set as:
EIBOR (1M / 3M / 6M / 12M) + bank margin
And EIBOR levels are already reflecting the current rate environment.
Mortgage rates today — snapshot as of mid-January 2026
Here’s a practical “market feel” using published bank info (always verify the exact offer you qualify for; pricing depends on salary transfer, segment, property, LTV, and risk profile):
1) Benchmark: where EIBOR sits right now
Standard Chartered publishes EIBOR reference levels and shows (updated 19 January 2026) 3M EIBOR ~ 3.590%, 6M ~ 3.560%, 12M ~ 3.590%.
ADCB’s EIBOR page (updated 18 January 2026) shows 1M ~ 3.6689%, 3M ~ 3.4998%, 6M ~ 3.5556%, 12M ~ 3.6426%.
2) Published fixed / starting rates
| Bank / Product | Example “from” / fixed options | Notes |
| FAB fixed mortgage | 3.99% (1–3 yrs with salary transfer + card), 4.19% (5 yrs) | Non-salary transfer shows higher (e.g., 4.24–4.44%). |
| ADCB standard mortgage | From 3.99% p.a. | Financing caps shown by residency/nationality. |
| Emirates Islamic (Manzili) | Rates as low as 3.49% p.a. | Mentions 1% processing fee. |
| Mashreq (KFS) | Fixed + variable structures (variable = 3M EIBOR + margin, floor can apply) | KFS example also shows fees & early settlement cap. |
| Dubai Islamic Bank (Home Finance) | EIBOR (3/6/12M) + margin | Shows LTV-style caps for nationals/expats. |
| HSBC UAE (rates page) | Variable: 3M EIBOR + fixed margin | Their “4.99% EIBOR” figure is an illustrative example on the page, not necessarily today’s EIBOR. |
What this means in plain English:
- Fixed deals being marketed in the high-3% to mid-4% range exist (usually with conditions like salary transfer, specific customer segments, or limited campaigns).
- Variable rates often land in the mid-4% to mid-6% range, depending on your bank margin + the EIBOR tenor used (1M/3M/etc.). The formula is visible across multiple banks’ disclosures.
Why “home loan interest rates” advertised can be confusing in the UAE
To find the lowest home loan interest rates, don’t compare the headline number only.
Always compare these 5 things
- Rate type: fixed, variable, or hybrid (fixed then variable).
- Benchmark & tenor: 1M vs 3M EIBOR matters for volatility and reset timing.
- Bank margin: the real negotiable lever (often “fixed for life” on variable structures).
- APR / total cost: fees can move the “true” cost meaningfully. Mashreq’s KFS shows how APR changes once fees/insurance are included.
- Floors / reversion rates: some products have a minimum/floor rate after the fixed period.
Home loan interest rate in Dubai 2026
Trend 1: Rates softened after the December 2025 base-rate cut
CBUAE’s base rate cut to 3.65% (effective 11 Dec 2025) set the tone for lower short-term funding costs vs earlier levels.
By mid-January 2026, published EIBOR reference levels are in the mid-3% range.
Trend 2: Banks are competing harder—but “best mortgage rates in UAE” usually come with conditions
FAB explicitly shows different fixed rates depending on salary transfer + credit card vs without.
This is why the best mortgage rates are often profile-driven, not “one rate for everyone”.
Trend 3: Variable-rate borrowers should watch EIBOR + margin (not just “today’s rate”)
If your home loan interest rate UAE is variable, your monthly payment changes as EIBOR resets (often quarterly for 3M EIBOR products).
Down payment rules (LTV): how they impact your rate
A lower LTV (bigger down payment) usually unlocks better pricing.
Practical caps shown in bank disclosures:
- ADCB shows up to 80% financing for expatriates, 85% for UAE nationals, and 50% for non-residents.
- Mashreq’s KFS shows up to 80% for expats, 85% for UAE nationals, 65% for non-residents.
- Central Bank rulebook amendment text also references LTV caps based on property value bands (e.g., ≤ AED 5m vs > AED 5m).
Action: If you’re chasing the lowest home loan interest rates, push your down payment to reduce LTV and negotiate margin.
A step-by-step playbook to get the best mortgage rates
Step 1) Decide: fixed vs variable vs hybrid (based on your risk comfort)
- Fixed is for payment certainty (great if you want predictable cashflow).
- Variable can win if rates drift down, but your EMI can move.
Most buyers in Dubai end up choosing a hybrid: 1–5 year fixed then variable, because it balances certainty + flexibility.
Step 2) Shop the margin and the fees — not just the headline rate
Fees can quietly increase total cost:
- Mashreq KFS shows examples including processing fee (1.05% of loan amount), valuation fee, insurance costs, and early settlement structure.
- Emirates Islamic explicitly mentions a 1% processing fee for Manzili.
Negotiation targets (real-world):
- Reduce/waive processing fee
- Lower margin on the variable portion
- Free valuation / partial settlement perks
- Better reversion rate after fixed period
Step 3) Confirm your early settlement / refinance plan before signing
UAE borrowers refinance a lot when pricing improves. Your cost to exit matters.
HSBC states early settlement charge is 1% (1.05% incl. VAT) of outstanding or AED 10,000 (AED 10,500 incl. VAT), whichever is less. Mashreq KFS shows the same cap structure.
Consumer guidance also summarizes the CBUAE directive as 1% or AED 10,000 (whichever is less).
Action: In 2026, assume you might refinance. Choose a mortgage where the exit cost won’t trap you.
Step 4) Use EIBOR to sanity-check “current mortgage rates”
If a bank offers EIBOR + margin, you can estimate your “rough” variable rate:
Estimated rate ≈ (current EIBOR tenor) + (your margin)
Then ask the bank: “What margin are you offering me at my LTV?”
Step 5) Get pre-approval and use it to negotiate
Pre-approval gives you leverage and clarity on:
- approved amount (affordability)
- exact pricing tier
- required documents and timelines
Multiple banks promote fast pre-approval workflows.
Dubai mortgage rates vs UAE mortgage rates
The benchmark is the same (CBUAE base rate + EIBOR dynamics affect the whole UAE).
What changes in Dubai is usually:
- property prices / LTV and risk appetite by area/project
- bank appetite for certain developers/projects
- promotions (fee waivers, buyout campaigns)
So “mortgage rates Dubai” is often less about a different benchmark and more about deal availability and borrower profile.
Get Expert Help from Credit Link
Finding the right mortgage is easier with the right partner. At Credit Link, we compare multiple banks, negotiate the best home loan interest rates, and guide you from pre-approval to final disbursement—at no extra cost to you. Speak to our specialists today and secure the best mortgage rates in the UAE with confidence.
FAQs
1) What are current home loan interest rates in the UAE in 2026?
Home loan interest rates vary by bank and profile, with fixed offers generally in the high-3% to mid-4% range and variable loans based on EIBOR plus margin. Your final rate depends on income, down payment, and property type.
2) How are mortgage rates Dubai calculated?
Most mortgage rates in Dubai follow the formula EIBOR + bank margin, especially for variable products, while fixed rates are offered for limited periods before converting to variable.
3) What is the difference between fixed and variable mortgage interest rates?
Fixed rates keep your monthly payment stable for a set period, while variable rates change with EIBOR movements over time. Variable options can become cheaper or more expensive depending on market conditions.
4) How can I get the lowest home loan interest rates in the UAE?
You can secure better pricing by increasing your down payment, transferring salary to the bank, and negotiating the margin instead of just the headline rate. Comparing total cost including fees is essential.
