Reviewed by Kaushal Jha · Published · 6 min read
Key facts
- All your monthly loan repayments, including the new mortgage, can't exceed 50% of your income
- Banks stress-test the mortgage at 2 to 4 percentage points above the current rate
- Maximum loan: 7 times annual income for expatriates, 8 times for UAE nationals
- Bonuses and irregular income are discounted or excluded
Your debt burden ratio (DBR) is the share of your monthly income that goes on repaying debt. It's the single biggest factor in how much a UAE bank will lend you.
The 50% limit
Under Central Bank rules, your total monthly debt repayments, including the new mortgage, can't be more than 50% of your gross salary and any regular income from a defined source. Banks don't have to lend up to this limit, and must consider your circumstances rather than applying it automatically.
Example: with a monthly income of AED 30,000, total repayments can be at most AED 15,000. If you already pay AED 4,000 on a car loan and credit cards, the most the mortgage payment could be is AED 11,000.
What counts as debt
- Personal and car loans
- Credit cards. Banks usually count a monthly amount based on each card's limit, even if you don't use it
- Any other mortgages
- The new mortgage itself
Stress testing
Banks must test whether you could still afford the mortgage if rates rise. They calculate the payment at 2 to 4 percentage points above the current rate, depending on where rates are in the cycle. If you take an introductory rate, they test against the rate that applies after it ends.
Income caps
Separately from DBR, the maximum mortgage is 7 times your annual income if you're an expatriate, and 8 times for UAE nationals.
Which income counts
Only reliable, sustainable income counts. Bonuses and other non-standard or temporary income must be discounted, or excluded if they aren't guaranteed. For an investment property, banks must deduct at least two months' rent when they assess affordability, to allow for empty periods. Self-employed income is assessed in different ways by different banks. See mortgages for the self-employed.
After retirement age
If your mortgage runs beyond your expected retirement age, the bank must check that the balance at that point can still be repaid within a 50% DBR from your post-retirement income.
How to improve your DBR
- Pay off or reduce small loans before applying
- Close credit cards you don't need, or lower their limits
- Add a co-applicant's income, where the bank allows it
- Choose a longer term, up to the 25-year maximum, to lower the monthly payment
Use our eligibility and DBR calculator for a first estimate, then check your eligibility with an adviser.