If you already have a Dubai mortgage, refinancing can be a smart move—but only if the savings outweigh the costs. In the UAE, people use a few terms that often get mixed up: refinancing, remortgage, mortgage buyout, and equity release. Here’s what they mean, what you pay, and how the process works in Dubai.
Refinancing vs buyout vs equity release (simple definitions)
- Mortgage buyout / switch lender: you settle your existing mortgage and move to a new bank for better terms (rate, features, service).
- Refinancing / remortgage: a broader term that can include switching lenders and/or changing your loan structure (rate type, tenor, payment plan).
- Equity release: refinancing where you increase borrowing against your property’s value to access cash, subject to lender policy and affordability.
The key cost everyone asks about: early settlement fee
When you refinance, the old mortgage usually gets settled early. The UAE Central Bank rulebook caps early settlement (full or partial) fees for home loans at 1% of the outstanding balance or AED 10,000 (whichever is less).
Dubai Land Department (DLD) fees you may face in a refinance / buyout
When you transfer/register a mortgage in Dubai, DLD has defined fees and document requirements.
Mortgage transfer (moving mortgage to a new bank):
DLD’s Mortgage transfer application lists required documents like:
- No-objection letter for mortgage transfer from the previous bank
- Letter from the new bank indicating registration of the mortgage
- Three certified mortgage contracts
- For provisional sale/off-plan cases: developer E.NOC via Dubai REST
DLD transfer-related fees (as per DLD e-services):
- 25% of the mortgage value (mortgage transfer/registration fee basis)
- Service partner fee shown on DLD pages: AED 4,000 + VAT (and AED 5,000 + VAT for provisional/Oqood cases).
Important: exact steps and fees can vary by transaction type (ordinary title deed vs provisional/Oqood vs portfolio), so the bank/broker usually aligns the correct DLD service route.
Step-by-step: how refinancing / mortgage buyout works in Dubai
- Check break-even
Estimate: (monthly savings × months) vs (early settlement fee + DLD mortgage fees + bank processing/valuation). If break-even is too long, wait.
- Get an offer from the new bank
You’ll typically need an updated affordability review and property checks before finalizing.
- Request documents from the current bank
A key requirement in DLD’s process is the NOC/transfer no-objection letter from the existing lender.
- Prepare DLD mortgage transfer paperwork
The DLD list includes the new bank’s registration letter and three certified mortgage contracts.
- Execute transfer / register the new mortgage
DLD processes the transfer and applies the fees (notably the 0.25% mortgage fee and partner fees where applicable).
- Close out the old mortgage and continue under new terms
Your new bank’s terms (rate type, reset, fixed period, etc.) become your operating reality—this is why it’s worth reading the rates guide before signing.
Common pitfalls (that slow refinancing)
- Ignoring total costs and focusing only on headline rate (you need break-even thinking).
- Starting too late if you’re exiting a fixed period—plan ahead so you’re not forced into a rushed transfer.
- Missing transfer documents (DLD is explicit on NOC/new bank letter/contracts).
