UAE mortgage rules agreed
The UAE Central Bank has agreed to cap mortgages at levels recommended by the UAE Banks Federation.
Under the new rules, citizens will be able to borrow up to 80 per cent of a property’s value, while expatriate mortgages will be capped at 75 per cent, reported Al Khaleej, citing a senior banking source. Second homes will be capped at 15 per cent less.
Some banks came under criticism for enticing customers to borrow more than they could afford, which hurt the sector as a whole, the Arabic daily newspaper reported. The Central Bank also warned banks against delaying customers from switching to cheaper loans, saying institutions could face severe penalties for such practice, according to the newspaper report.
The Central Bank stressed it is acting in the public’s interest, and will pass the bill “in the near future”, which will be circulated to all banks operating in the UAE, Al Khaleej quotes the source as saying.