Paying off or switching a Dubai mortgage early: what a non resident pays

A UAE bank may charge at most 1 per cent of the outstanding balance or AED 10,000, whichever is less, when a home loan is settled early, under the fee annexure to the Central Bank of the UAE's Consumer Protection Standards, read on 14 November 2026. For a non resident owner weighing whether to clear a Dubai loan, move it to a cheaper bank or sell before the term ends, that cap is the starting point, and the Dubai Land Department publishes fixed fees for each route.

What the Central Bank allows a bank to charge

The annexure to the Consumer Protection Standards, reference N 1158/2021, caps early settlement fees and partial settlement charges at 1 per cent of the outstanding balance or AED 10,000, whichever is less. A liability letter, the document that states what you owe, is capped at AED 85, a clearance letter at AED 95, a no objection certificate at AED 150 and a late payment fee at AED 700. The same figures appear in Appendix 2 of Regulation No. 29/2011 on bank loans to individual customers, which says the caps are reviewed annually.

Bayut reported, in an article updated on 27 October 2026, that the Central Bank's board restored the 1 per cent cap through Decision No. 96 of 2019 after a 3 per cent cap had applied from June 2018. The annexure sets no cap on a processing fee, so a new loan's upfront cost is a matter for each bank's published key facts statement.

Route one: clearing the loan and releasing the title

Once the bank is paid, the mortgage must be removed from the title. The Dubai Land Department's mortgage release service, read on 14 November 2026, charges AED 1,000 for removing an ordinary mortgage, AED 250 for the title deed, an AED 10 knowledge fee and an AED 10 innovation fee, plus a service partner fee of AED 300 plus VAT at a trustee centre. The bank can submit a regular release online, and the page gives 10 to 15 minutes.

On AED 1.5 million outstanding, the settlement fee is capped at AED 10,000, because 1 per cent would be AED 15,000, plus AED 1,585 at the Department including VAT on the service partner fee.

Route two: moving the loan to another bank

A change of lender is registered as a mortgage transfer. The Department's transfer page, read on 14 November 2026, charges 0.25 per cent of the mortgage value plus AED 250 for the title deed, with a service partner fee of AED 4,000 plus VAT, and requires a no objection letter from the previous bank and a letter from the new bank confirming the registration. On AED 1.5 million that is AED 3,750 plus AED 250 plus AED 4,200 at the Department, before the old bank's settlement fee of up to AED 10,000 and the new bank's processing and valuation charges, which the regulator does not cap.

Two cautions. The transfer page lists UAE citizens and residents under residency status, so a non resident should confirm with both banks whether a transfer or a release followed by a new registration applies. And the saving has to beat the cost: our guide to UAE mortgage rates in 2026 explains how offers are compared, and our refinance page sets out the documents.

Route three: selling a home that still carries a loan

The Department's service for registering the sale of a mortgaged property, read on 14 November 2026, requires a liability letter from the bank stating the remaining amount, identification, which for non resident foreigners is a valid passport, and three manager's cheques: one to the bank for the debt, one to the seller for any balance and one to the Department for the 4 per cent sale fee. The page lists an AED 1,290 mortgage release procedure fee and an AED 315 registrar fee, and says the sale completes only after the release letter is submitted.

Bayut's guide, updated on 13 November 2026, describes the usual sequence: sign the Form F sale agreement, obtain the liability letter and the developer's no objection certificate, block the property in the buyer's name at a trustee office so that the buyer's funds can clear the seller's loan, collect the bank's clearance letter and title deed, then transfer. When the buyer also borrows, the guide says the process takes longer because the seller's loan is cleared only after the buyer's bank gives final approval. Our guide to the cost of buying property in Dubai covers the buyer's side.

What it means for investors

First, the exit cost of a Dubai mortgage is known in advance and small relative to the loan. On AED 1.5 million outstanding, the regulator's cap of AED 10,000 is 0.67 per cent, and the Department's release fees add AED 1,585. Still read the settlement clause of the offer letter, because the cap is a ceiling and banks price beneath it differently.

Second, for a buyer in the United States, Canada or Latin America, the dirham is pegged at AED 3.6725 to the US dollar, so the AED 10,000 cap is about USD 2,700 and an AED 1.5 million balance about USD 408,000, with no currency risk against the dollar. The Consumer Financial Protection Bureau's explainer, reviewed on 11 September 2024, says not all US mortgages carry a prepayment penalty and that where one exists it typically applies in the first three or five years; a UAE home loan can carry a settlement fee for its whole term, but at a regulated ceiling. Confirm the tax treatment of a sale with an adviser; our US investors page lists the questions.

Third, financing a replacement purchase follows the same rules as the first. The Central Bank caps a mortgage at 80 per cent of value for an expatriate's first home under AED 5 million, 60 per cent for a second or investment property and 50 per cent for any off plan purchase under Circular 31/2013, and each bank sets its own non resident terms within those limits.

What we recommend

Before settling, switching or selling, ask the bank for its liability letter and its written settlement fee, check both against the AED 85 and AED 10,000 caps, and price the Land Department fees from the three service pages cited here. Confirm the current position with the authority before relying on it, since the Central Bank reviews its caps each year. Castilion Estates arranges and reviews mortgages as a RERA licensed broker and can set a switch or settlement against the cost of staying put.