Refinancing and buyouts
A better rate is only better after the costs.
See your new repayment, every switching cost, when the saving pays for itself, and whether a longer term quietly makes the loan more expensive.
In short
- Leaving your bank early costs at most 1% of the balance or AED 10,000, whichever is less.
- A new bank adds valuation, processing and mortgage registration fees, so a lower rate only pays off once the monthly saving has recovered those costs.
- The best time to review is when your fixed period ends and the rate moves to EIBOR plus a margin.
The new rate is illustrative. Bank fees cover processing and valuation; DLD charges cover the mortgage release and new registration.
Explore Refinancing Options. An advisor checks live buyout offers and the exact settlement figure.
Illustration only. Lifetime saving compares the remaining payments on your current loan with the new loan's payments plus all switching costs. Like for like saving compares cash paid and the balance still owed at the end of the shorter term. Break even is when cumulative interest saved exceeds the switching costs. Rates are assumed constant; actual follow on rates move with EIBOR. Reviewed 21 October 2026.
How a buyout works
From liability letter to new title deed
- Liability letter. Your current bank states the exact amount to settle. Its fee is capped at AED 85 by the Central Bank.
- Early settlement. Early settlement fee is capped at 1% of the outstanding balance or AED 10,000, whichever is less. Source.
- Valuation and approval. The new bank values the property and issues its offer.
- Settlement and registration. The new bank pays off the old loan; the mortgage is released and re registered with the Dubai Land Department.
- Fees in cash. Since 1 February 2025 banks may not add DLD or agency fees to the mortgage; they are paid in cash.
Refinancing questions
What is a mortgage buyout in the UAE?
A buyout is when a new bank repays your existing mortgage and takes over the loan, usually at a better rate or on better terms. You keep the same property; only the lender changes. The new bank needs a liability letter from your current bank showing the amount to settle.
How much does it cost to switch banks?
Expect the early settlement fee charged by your current bank, capped by the Central Bank at 1% of the outstanding balance or AED 10,000, whichever is less, plus the new bank's processing and valuation fees and the DLD charges to release and register the mortgage. Some banks waive part of these on buyouts.
When is refinancing worth it?
When the interest you save recovers the switching costs within a period you are comfortable with, and the new terms suit your plans. A lower monthly payment alone is not proof of a saving if it comes from a longer term.
Can I refinance during my fixed period?
Usually yes, but check your offer. The early settlement cap still applies, and the economics depend on how much of the fixed period remains and the gap between your rate and the new one.
Castilion Mortgage Advisory
Mortgage advice from Castilion Estates, licensed as a Real Estate Mortgage Broker. One team for the property and the finance behind it.
Castilion is a mortgage broker, not a lender. Calculators and assessments are indicative illustrations, not offers, pre approvals or approvals. Rates, fees and eligibility are set by each bank and are subject to its credit assessment, valuation and final offer, and to the regulations of the Central Bank of the UAE. Castilion Realty L.L.C., RERA ORN 46392.