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UAE Mortgage
Mashreq Bank mortgage: full guide
Author:
Kata Hahn
Date:
23 January 2023
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A guide to Mashreq Bank mortgage offers, including their terms/conditions, typical loan offers, and application process with required documents.
Overview of terms and conditions
Mashreq Bank was established in 1967 and has been one of the best-performing banks in the UAE over the past five decades. As of 2021, their total assets surpassed AED 177 billion. Mashreq is the oldest privately owned bank in the UAE with strong coverage across the Middle East as well as international offices in Europe, Asia, Africa, and the US. Mashreq Neo is their intuitively designed mobile banking app that’s popular among their customers.
Mashreq bank has various mortgage products including:
Mashreq bank has various mortgage products including:
- Home Loan for Residents
- Home Loan for Non-UAE Residents
- Commercial Mortgage for UAE Residents
- Islamic Mortgage
The following are the general terms and conditions for their standard home loans that apply to all mortgage applicants.
- Conventional & Islamic loans
- Salary transfer not required
- Loan amount up to AED 10,000,000
- Minimum monthly salary AED 15,000
- Bank valuation fee: AED 2,625
- Pre-approval fee: AED 1,050
- Partial settlement terms
- Prepayment of up to 25% of the outstanding loan amount allowed per annum
- In excess of 25%, 1.05% penalty on the exceeding amount, capped at AED 10,500 (including VAT)
- No late payment fee
- Bank transfer fee - 1.05% penalty on the exceeding amount, capped at AED 10,500 (including VAT)
- Life insurance terms
- For conventional loans: 0.165% per annum of the outstanding loan amount; 0.33% per annum of the mortgage balance for joint life if both incomes used for affordability
- External life insurance for conventional loans is assignable - policy assignment fee AED 3,000 + VAT
- For Islamic loans: 0.17% per annum of the outstanding loan amount; 0.34% per annum of the mortgage balance for joint life if both incomes used for affordability
- Building insurance: 0.06% per annum of the property value
Mashreq allows borrowers to include up to 80% of the associated mortgage fees in their loan amount. They also have a reward system with Salaam Points where new clients can get cash back rewards if they transfer their salary to their Mashreq account.
Let’s take a look at Mashreq’s loan offers for borrowers that are employed, self-employed, and non-residents, as well as their Islamic and commercial loan options. Take note that the actual rates listed were updated by Mashreq on January 2nd, 2023 and that the rates, fees, and costs may change without notice. The 3-month EIBOR rate is from the UAE Central Bank website and is current as of January 20th, 2023. EIBOR rates are updated daily and subject to change with the market.
Mortgages for employed borrowers
Mashreq has many mortgage options for employed borrowers with rates varying based on the client’s designation. Clients may be eligible for preferential pricing if their salary is greater than AED 25,000 or the total loan amount is greater than AED 3,500,000. Otherwise, borrowers making less than AED 25,000 a month will be subject to slightly higher rates.
In addition, when it comes to their variable-rate offers, clients lacking full documentation may qualify but will be subject to increased rates and a significantly higher minimum floor rate. These borrowers must have a maximum loan-to-value ratio of 50% and qualify based on their income and bank balance from the past 3 months.
Fixed-rate offers:
In addition, when it comes to their variable-rate offers, clients lacking full documentation may qualify but will be subject to increased rates and a significantly higher minimum floor rate. These borrowers must have a maximum loan-to-value ratio of 50% and qualify based on their income and bank balance from the past 3 months.
Fixed-rate offers:
- Preferential pricing
- 5.69% fixed for 3 years
- Reversion Rate being a margin of 1.75% + 4.48% (3-month EIBOR) = 6.23%
- Borrowers with a salary less than AED 25,000
- 5.85% fixed for 3 years
- Reversion Rate being a margin of 2.00% + 4.48% (3-month EIBOR) = 6.48%
- Preferential pricing
- 1.49% fixed margin for the life of the loan + 4.48% (3-month EIBOR) = 5.97%
- Minimum floor rate of 1.49%.
- Minimum salary of AED 25,000
- Borrowers with a salary less than AED 25,000
- 1.65% fixed margin for the life of the loan + 4.48% (3-month EIBOR) = 6.13%
- Minimum floor rate of 1.65%.
- Borrowers lacking full documentation
- 2.25% fixed margin for the life of the loan + 4.48% (3-month EIBOR) = 6.73%
- Minimum floor rate of 3.99%
Other conditions/terms/fees for employed borrowers:
- No bank processing fee
- Service fee: AED 5,250
- Down payment from:
- 15% for nationals
- 20% for expats
Mortgages for self-employed borrowers
Mashreq loan offers for self-employed borrowers are the same as those for salaried employees lacking full documentation. It’s important to note the bank processing fee of 1% of the loan amount that self-employed borrowers must pay. Self-employed borrowers can also apply for a mortgage if they lack documentation, but the rates may vary.
Variable-rate offer:
Variable-rate offer:
- 2.25% fixed margin for the life of the loan + 4.48% (3-month EIBOR) = 6.73%
- Minimum floor rate of 3.99%
Other conditions/terms/fees for self-employed borrowers:
- Bank processing fee: 1% of loan amount
- Service fee: AED 5,250
- Business financials required
- Down payment from:
- 15% for nationals
- 20% for expats
Learn more about what you can typically expect from UAE banks as a self-employed borrower regarding conditions, documentation, bank assessment, and process length.
Mortgages for non-resident borrowers
Mashreq provides non-residents with mortgage loans; however, the rates will be higher and the conditions less favorable due to the potential higher-risk of these borrowers. Non-residents that are both salaried employees and self-employed may be eligible to finance a residential property for investment purposes or as a secondary residence. They are subject to the 1% bank processing fee just like self-employed borrowers, Non-residents also have a higher service fee and must make a significantly higher down payment than borrowers that are UAE residents. Non-residents can also apply for a mortgage if they lack documentation, but the rates may vary.
Variable-rate offer:
Variable-rate offer:
- 2.99% fixed margin for the life of the loan + 4.48% (3-month EIBOR) = 7.47%
- Minimum floor rate of 4.49%
Other conditions/terms/fees for non-resident borrowers:
- Bank processing fee: 1% of loan amount
- Bank arrangement fee AED 1,050
- Service fee: AED 7,500
- Down payment from 50%
Islamic mortgages
Mashreq Al Islami Finance Company (MAIFC) is the branch of Mashreq that offers Shari’ah compliant mortgages that are available to Muslims. Many of the terms and conditions are similar to those listed in the previous sections. Just as with conventional loans, the borrower’s residency and citizenship will affect their loan offers. Residents and non-residents that are employed and self-employed may be eligible for an Islamic loan.
Conditions/terms for expatriates:
Conditions/terms for expatriates:
- Minimum down payment of:
- 20% for residents
- 50% for non-residents
- Can finance: completed properties for self use or investment purposes in Dubai and Abu Dhabi
Conditions/terms for Emiratis:
Conditions/terms for Emiratis:
- Minimum down payment of 15%
- Can finance: completed properties in freehold and non-freehold areas of all Emirates
Commercial mortgages
Mashreq bank promises low-interest rates and easy processing for their commercial mortgage loans.
General terms/conditions:
General terms/conditions:
- Loan amount up to AED 10,000,000
- Maximum loan tenor of 15 years
- Eligibility:
- Residents only
- Self-employed individuals only
- Can finance completed properties: shops, office spaces, warehouses, retail spaces, and other business units
While not specified on their website, Mashreq may also allow non-residents to take out commercial mortgage loans.
Variable rate offer for non-residents:
- Fixed margin of 2.99% for life of the loan + 4.48% (3-month EIBOR) = 7.47%
- Minimum Floor Rate 5.99%
Conditions/terms for non-residents:
- 1% processing fees
Application process
The first page of Mashreq Bank’s mortgage application is below. It can be useful to apply through a mortgage broker that can give you guidance throughout the application process and help increase your chances of getting your loan approved.
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Not only will you need to fill out the mortgage application, but you’ll need to submit a series of documents in order for the bank to verify your identity, analyze your financial situation, and approve you for a loan. The documentation that Mashreq requires for salaried and self-employed mortgage applicants is listed in the following table.
There may be additional documentation that’s required. For example, non-resident borrowers will also need to provide personal bank statements from the last 3 months.
When applying for a commercial loan, you’ll need to submit:
- Application form
- Passport copy with valid visa
- Last 6 months' bank statements personal and company
- Liability letter from the bank addressed to Mashreq Bank
- Memorandum and articles of association
- Audited financial statements of last 2 years
- Board resolution copy
- Trade license copy
- Copy of Chamber of Commerce Registration
- Business profile on company letterhead
- Photocopy of purchase contract
- Photocopy of down payments
To sum up
Mashreq has plenty of financing options for UAE residents, non-residents, and self-employed borrowers, as well as those looking for Islamic or commercial loans. While this guide has laid out their potential offers, a mortgage broker can provide you with personalized loan offers and give you start-to-finish guidance along the way to property ownership. Kredium has professionals with expert insight into the UAE real estate market. We can help nationals, residents, and non-residents get a mortgage in the UAE.
If you have a property in mind and want to estimate your monthly mortgage payments or potential rental income, use our handy mortgage calculator. If you’re still searching, you can peruse thousands of Dubai properties from the top developers in the UAE. Our real estate and mortgage blogs can help you become an informed buyer. You can take the UAE real estate market by storm, just contact us or register on our website to get in touch.
If you have a property in mind and want to estimate your monthly mortgage payments or potential rental income, use our handy mortgage calculator. If you’re still searching, you can peruse thousands of Dubai properties from the top developers in the UAE. Our real estate and mortgage blogs can help you become an informed buyer. You can take the UAE real estate market by storm, just contact us or register on our website to get in touch.
