If you’re nearing middle-age (40 years+) or retirement, read this guide to discover the mortgage options available to you in Dubai.
Dubai is a city bursting with innovation and modern, world-class infrastructure. Considering this along with its tax-free incentives, stable economy, well-regulated real estate market, and residency by investment option, it’s no surprise that people of all ages are interested in moving to and/or investing in Dubai. Getting a mortgage can be a complicated process, especially if you’re a borrower nearing your 40s or on your way towards retirement. This guide will cover everything you need to consider in the Dubai market from borrower age limits, mortgage tenure, payment schedules, and potential financing options.

Age limits for borrowers in Dubai

In 2019, the Central Bank of the UAE, which regulates all licensed financial institutions, removed their maximum age limit for both residents and non-residents seeking a mortgage loan (in addition to reducing prepayment fees). Previously, borrowers had to be less than 65 years old (or 70 years old if self-employed) upon loan maturity or the date when the loan is fully repaid. Eliminating these restrictions should open up possibilities for older property buyers to take out mortgage loans in the UAE. However, in practice, banks can still set their own lending conditions and most have maintained their previous age limits. 

In general, the maximum age limit for mortgage borrowers in Dubai is as follows:
  • If employed: 65 years of age
  • If self-employed: 70 years of age 

During retirement, people’s income streams often significantly change which can lead to a less stable financial situation. Since many people that are 65 years of age are probably nearing retirement, most banks and lenders regard them as higher-risk borrowers. This is the typical rationale banks have for keeping their age restrictions in place.
A person putting coins in a glass jar for their retirement savings with a clock next to it indicating a sense of urgency.

How does the age limit affect mortgage tenure? 

A mortgage tenure is the amount of time over which you must repay your mortgage loan fully. The lender specifies the mortgage tenure in the terms and conditions of your loan offer and it determines the length of time you’ll be required to make mortgage payments. In the UAE, the maximum mortgage tenure allowed is 25 years. Most borrowers choose a loan with a longer mortgage tenure since it makes their monthly payments smaller, and gives them more time to repay the loan and greater flexibility in their finances. 

The age limits that banks have in the UAE means that older borrowers are required to take out mortgage loans with shorter tenures, in order to fully repay their loan before they surpass the maximum age restriction. The closer to 65 years of age (or 70 years of age for those that are self-employed), the shorter loan tenure they will be offered. A shorter tenure in turn affects the borrower’s payment schedule, as we’ll see below.

Example scenarios

The table below considers a hypothetical situation where 3 borrowers of different ages each take out a mortgage loan of AED 1,000,000 with a 5% fixed interest rate (keep in mind, interest rates are not fixed for the entire mortgage loan tenure in the UAE). In this case, we’ll assume that the borrowers are all residents and currently employed.
Borrower's age 35 years of age 45 years of age 55 years of age
Total loan amount AED 1,000,000 AED 1,000,000 AED 1,000,000
Fixed interest rate 5% 5% 5%
Maximum tenure 25 years 20 years 10 years
Age upon loan maturity 60 years of age 65 years of age 65 years of age
Monthly payment AED 5,846 AED 6,600 AED 10,607
Total amount paid back AED 1,753,770 AED 1,583,894 AED 1,272,786

As you can see, the borrower that is 35 years of age is unaffected by the age restriction since they are 60 years old upon loan maturity. On the other hand, the borrowers that take out a loan at 45 and 55 years of age each have a maximum tenure that is adjusted to allow them to completely pay off the loan by the age of 65. The shorter the tenure, the higher their monthly payments, but the lower the amount they pay back in total (since not as much interest accumulates over fewer years). 

By using a mortgage calculator, you can look at more scenarios and start planning your budget.

Financing options for retirees

Although rare, some banks in the UAE may consider borrowers that are older than 65 years of age on an individual basis. They would likely then complete more rigorous affordability checks to ensure that you can meet the monthly payments, taking into account whether you have a regular source of income or are still employed (despite being past the typical age of retirement). 

Or if you already own a property, you can consider getting an equity release loan. This allows you to release some of the equity that you’ve built up (by making mortgage payments or buying the house outright in cash) while still maintaining ownership of the property. Equity release loans provide you with a lump sum of money that you can use to finance your second property purchase. They come with their own specific terms and conditions, but can be a feasible option for retirees.

Going forward

You’re now familiar with the most important considerations and some of the financing options that may be available to you. Luckily, a mortgage broker like Kredium, can guide you through the mortgage loan process and help you weigh all your options. Whether you’re a UAE national, resident expat, or non-resident we can provide you with personalized loan offers (including equity release loans) from all of the retail banks in the UAE. Kredium also has thousands of property listings in Dubai where you can find your dream property. Investors should consider hassle free projects with guaranteed returns and how to optimize your rental yield. No matter what stage of the process you’re in, you can contact us or register on our website to get in touch with our mortgage and real estate experts in Dubai.
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