The government of United Arab Emirates in order to avoid insecurity of market had declared restrictions on providing mortgage. They had restricted the period of returning the loan as 25 years and in the new rules it is said that mortgages allowed for purchase to foreigners would be 65% whereas for residents it would be 70%.
The rules also states that not more than 50% will be taken on monthly basis from a loan borrower and the total amount should not be more than his income of seven years this is for a foreigner. For the residents not more than his eight year income should be taken.
The central bank of UAE had restricted the mortgage lending to avoid further collapse of the property market as it had been collapsed in 2008. The rule does enforce restrictions on 28 foreign banks and 23 national banks situated in the country.
The an immigrant buyer who is buying a home first time that has a value of not more than 5 million dirham ($1.36 million) his loan value should not be more than 65% and if an Emirati is buying it his loan should not be more than 70%. And if a buyer is taking loan to buy a second property his loan should not be more than 60% for foreign buyer and 65% for Emirati buyer of second property. Maximum amount of loan for an off-plan property should not be more than 50% of the value of property.
The rapid implementation of these types of loans is due to the continuous raise in the prices of lands and the doubled transaction taxes. These restrictions can be slow if the buyers buy the properties with cash.