How to Finance a Second Home in the UAE in 2026: Deposits, Rules and Costs
- Published 28 January 2025
- Updated 10 November 2026
- 9 min read
- Data verified on 10 Nov 2026
In short
To finance a second home in the UAE, expect a loan of at most 60% of the value as an expatriate and 65% as a UAE national, whatever the price, because only one property per borrower qualifies for the 80%–85% first-home caps. Your existing and new loans must fit within 50% of gross income after a stress test, and banks deduct at least two months’ rent on a let property. On a AED 1.5 million flat, an expatriate needs about AED 670,000 in cash including Dubai fees.
CBUAE mortgage regulations, consolidated 8 Apr 2020 · Dubai Land Department fees, Nov 2026 · Valorisimo calculation
60%max LTV
Expatriate cap on a second home or investment property (65% for UAE nationals)
Source: CBUAE mortgage regulations, 2020
2 monthsof rent deducted
Minimum void allowance banks apply to rental income in the DBR test
Source: CBUAE mortgage regulations, 2020
5 yearsinterest-only max
Longest deferred-principal period, allowed on investment loans only
Source: CBUAE mortgage regulations, 2020
Second homes in the UAE need a larger deposit than a first home.Photo: © VALORISIMO
In this article · 9 sections
What are the mortgage rules for a second home in the UAE in 2026?
The Central Bank treats every property after your first home as a “second and subsequent house or investment property”, with a lower loan-to-value cap and stricter affordability tests.
Under the Regulations Regarding Mortgage Loans of the Central Bank of the UAE (CBUAE), consolidated on 8 April 2020, a second home can be financed up to 60% of its value for an expatriate and 65% for a UAE national, whatever the price. The higher first-home caps (80% and 85% below AED 5 million) are available for only one property per borrower. So a buyer who already owns a mortgaged home, or who buys a holiday flat in Dubai while living in Abu Dhabi, normally needs a deposit of at least 40% (35% for nationals).
The rules are minimums for banks: a lender can ask for more. Off-plan purchases are capped at 50% for everyone, so a second home bought from a developer before completion needs half the price in cash, or a payment plan.
| Rule | First home (owner-occupier) | Second home or investment property |
|---|---|---|
| Expatriate LTV | 80% under AED 5m; 70% above | 60%, whatever the value |
| UAE national LTV | 85% up to AED 5m; 75% above | 65%, whatever the value |
| How many qualify | One property per borrower | Every other property |
| Rental income in DBR | Not applicable | At least two months’ rent deducted for void periods |
| Interest-only option | Not allowed | Investment loans only, max 5 years from first drawdown |
| Off-plan | 50% for all buyers | 50% for all buyers |
Source: CBUAE Rulebook, Regulations Regarding Mortgage Loans (Circular 31/2013, amended by Board Resolutions 96/2019 and 31/2/2020; consolidated version of 8 April 2020), read 10 November 2026.
Second home or investment property?
For the LTV the distinction does not matter: both fall in the same 60%/65% category. It matters for the affordability test, because a let property brings rental income that the bank may count, after deductions, and for the option of interest-only repayments, which the regulations reserve for investment loans. The complete rulebook for first homes is in our UAE mortgage guide.
How much cash do you need to buy a second home?
On a second home, plan on 40% of the price as an expatriate, plus registration and trustee fees of roughly 4.5%–5% in Dubai.
The Central Bank requires the down payment to come from your own resources, not from personal loans or credit cards. Equity in your first home can still help, through a top-up or a separate release loan on that property, but only within its own LTV and your overall debt burden. The table below shows the cash needed at three price points.
| Purchase price | Buyer | Max loan | Deposit | DLD and trustee fees* | Cash needed |
|---|---|---|---|---|---|
| AED 1.5m | Expatriate (60%) | AED 900,000 | AED 600,000 | ≈ AED 71,150 | ≈ AED 671,150 |
| AED 1.5m | UAE national (65%) | AED 975,000 | AED 525,000 | ≈ AED 71,340 | ≈ AED 596,340 |
| AED 3m | Expatriate (60%) | AED 1.8m | AED 1.2m | ≈ AED 133,400 | ≈ AED 1.33m |
| AED 3m | UAE national (65%) | AED 1.95m | AED 1.05m | ≈ AED 133,780 | ≈ AED 1.18m |
| AED 6m | Expatriate (60%) | AED 3.6m | AED 2.4m | ≈ AED 257,900 | ≈ AED 2.66m |
| AED 6m | UAE national (65%) | AED 3.9m | AED 2.1m | ≈ AED 258,650 | ≈ AED 2.36m |
Illustrative calculation by Valorisimo using CBUAE caps (consolidated 8 April 2020) and Dubai Land Department fees read on 10 November 2026. *Assumes the buyer pays both 2% halves of the sale registration, 0.25% mortgage registration, AED 500 title deed and map, and two AED 4,000 + VAT trustee fees. Bank arrangement and valuation fees excluded.
Abu Dhabi
In Abu Dhabi, the sale is registered on the DARI platform. Bayut put the registration fee at about 2% of the price in October 2026 (usually split between buyer and seller), with mortgage registration at about 0.1% and a AED 1,000 title deed. The LTV caps are federal, so they are identical in both emirates.
How do banks assess affordability for a second mortgage?
Your first mortgage stays in the calculation. Both loans together, plus any other debt, must fit within 50% of gross income after a stress test.
The debt burden ratio
The maximum debt burden ratio (DBR) is 50% of gross salary and regular income. Banks must stress test it at 2 to 4 percentage points above the loan rate, and the regulations tell them not to apply the maximum automatically. An expatriate’s total financing is also limited to seven times annual income (eight times for UAE nationals).
How rental income is counted
For an investment property, the bank must deduct at least two months’ rental income to allow for non-rental periods. Illustration: if a flat is let at AED 90,000 a year, the bank counts at most ten months, AED 75,000, or AED 6,250 a month, and may discount further for service charges or uncertainty.
Retirement
If the loan runs past your expected retirement age, the lender must check that the outstanding balance can still be serviced at a DBR of 50% of your post-retirement income. The maximum age at the last repayment is set by each lender’s policy, and it often shortens the term for borrowers in their fifties.
| Loan of AED 900,000 over 25 years | Monthly repayment |
|---|---|
| At 3.95% (three-year fixed level, July 2026) | ≈ AED 4,725 |
| At 4.74% (3-month EIBOR + 1%, Q2 2026) | ≈ AED 5,126 |
| At 5.95% (stress test +2 points on 3.95%) | ≈ AED 5,771 |
| At 7.95% (stress test +4 points on 3.95%) | ≈ AED 6,917 |
| Interest-only at 4.74% (max 5 years) | ≈ AED 3,555 |
Rates: Khaleej Times, 12 July and 2 November 2026; stress band: CBUAE mortgage regulations. Repayments calculated by Valorisimo (standard annuity formula).
Can you take an interest-only mortgage on an investment property?
Yes, within limits: deferred-principal loans are allowed only for investment properties, and for no more than five years from the first drawdown.
An interest-only period lowers the early instalments. On AED 900,000 at 4.74%, the interest alone is about AED 3,555 a month against about AED 5,126 for a repayment loan over 25 years. The regulations require the lender to check that you can afford full principal and interest when the interest-only period ends, so it does not increase how much you can borrow. Few banks advertise this option; ask for it explicitly if your plan is to renovate or wait for a lease to mature.
Fixed or variable for a second home?
Khaleej Times reported three-year fixed rates around 3.95% in July 2026 and three-year packages of roughly 3.89% to 4% in November. The CBUAE Base Rate rose from 3.65% to 3.90% on 17 September 2026, and held on 28 October. A fixed period protects the yield on a let property while you test the rent; a variable rate suits buyers who expect to repay early. Early settlement on home loans is capped at 1% of the outstanding balance or AED 10,000, whichever is less.
Can you use equity in your first home to finance a second?
Often, but the equity release is itself a loan, and the regulations forbid funding a down payment with other borrowing such as personal loans or cards.
Banks offer top-ups, equity release or a refinance on a property you own outright or with a low balance. These are mortgage loans secured on the first property, so they fall under the same caps and count in your DBR. Whether a bank accepts cash released from one property as the deposit on another is a matter of its policy and of the “own resources” rule; ask before you plan around it. Selling investments or using savings is the simplest way to meet the deposit.
Switching banks
In Dubai, moving a mortgage to another bank is a DLD mortgage transfer: 0.25% of the mortgage value plus a AED 250 title deed fee and, via a trustee, AED 4,000 plus VAT. Releasing a mortgage costs AED 1,000 plus AED 250, and AED 300 plus VAT in trustee fees.
What does a second home cost to run?
The mortgage is only part of the bill. Service charges, insurance, utilities and, for let homes, management fees decide whether the property pays for itself.
- Service charges: charged per square foot each year by the owners' association; compare buildings using our guide to service charges in Dubai and Abu Dhabi.
- Insurance: life cover linked to the loan and building or contents cover are usually required by the bank.
- Utilities and housing fee: paid by the occupier; in Dubai a 5% housing fee is added to DEWA bills on the rent, and in Abu Dhabi a 3% fee applies to expat tenants (The National, 2016).
- Management: if you let the property, an agent or manager takes a fee, and VAT applies to agency and maintenance services.
- Vacancy: the bank already assumes two empty months; your own budget should too.
To check whether rents cover these costs in the area you are considering, use our ranking of the top rental yield areas in Dubai.
What are the steps to finance a second home?
The process is the same as for a first home, but the bank looks harder at existing debt and at the property’s income.
1. Tell your current bank and a second lender what you plan. Ask both for an approval in principle on the basis of your total debt. 2. Classify the property (second home, let or holiday home) with the bank before you sign, since it decides the LTV and the rental test. 3. Agree the price and sign the MoU, ideally conditional on finance. 4. Valuation by an independent valuer approved by the bank, before any irrevocable commitment. 5. Final offer and insurance, with the fee schedule attached to the contract. 6. Transfer and registration with the DLD in Dubai or on DARI in Abu Dhabi.
Comparing options
Before you choose, put two candidate properties side by side on price per square foot, service charge and expected rent. The investment comparison tool does it in a few minutes.
Is it worth financing a second home in the UAE?
It can be, if the rent or your own use justifies tying up 40% of the price and the yield covers a stress-tested repayment.
With three-year fixed rates near 4% in 2026 and a 40% deposit, the monthly cost of a AED 1.5 million flat financed at AED 900,000 is about AED 5,100. Whether that works depends on rent, service charges and how long you hold. Run the numbers at a higher rate and a lower rent before you commit.
Watch out
Bank policies, rates and fees change. The examples on this page are illustrative: ask for written quotes and the full fee schedule from at least two lenders before you sign a purchase agreement.
Frequently asked questions
What deposit do I need for a second home in the UAE?
At least 40% of the value as an expatriate and 35% as a UAE national, since the Central Bank caps second homes and investment properties at 60% and 65% LTV, whatever the price. Off-plan units are capped at 50% for everyone. Fees come on top.
Can I have two mortgages at the same time in the UAE?
Yes, on two different properties, as long as all repayments together stay within 50% of your gross income after the bank’s stress test, and total financing stays within seven times annual income for expatriates (eight times for UAE nationals).
Does rental income count towards affordability?
Usually, but not in full. For an investment property, the regulations require the bank to deduct at least two months of rent to cover void periods, and only reliable, verifiable income can be counted.
Can I get an interest-only mortgage on a buy-to-let?
Interest-only, or deferred principal, is allowed only on investment loans and for a maximum of five years from the first drawdown. The bank must still check that you can afford full repayments when that period ends.
Can I use a personal loan for the second-home deposit?
No. The Central Bank requires the down payment to come from your own resources, not from other borrowing such as personal loans or credit cards.
Figures are indicative as of the date shown: check them with official sources before any decision.
- For information only; this is not tax, legal or financial advice.
