Mortgages for new-build properties in Dubai: what buyers need to know

Dubai’s property market continues to grow rapidly, and new financial products are becoming available to buyers. One such option is the ability to secure a mortgage for a new-build property even before the development is completed.

This applies to projects by major developers Meraas and Nakheel, who are behind such well-known locations as Bluewaters, City Walk, Port de La Mer, Palm Jumeirah, Dubai Islands and other areas of Dubai.

This is a significant change for buyers, as previously, purchasing property during the construction phase was largely based on a payment plan provided by the developer. Now, in some cases, it is possible to involve a bank even before the property is completed and secure financing during the construction phase.

How it works

A mortgage for a new-build property is not available immediately upon purchase and is not available for all properties. For a buyer to be eligible for such financing, the following basic conditions must be met:

• approximately 50% of the property’s value has been paid;

• construction of the project has reached approximately 30% completion;

• the property meets the conditions for mortgage financing;

• the buyer passes the bank’s checks on income, documents and financial history.

In other words, this is not a universal mortgage for everyone, but an additional option for those purchasing a property in specific developments and meeting the bank’s requirements.

If you are already considering a purchase in Meraas or Nakheel developments, it is best to check in advance whether financing is available for your chosen property. To do this, you can submit an application and receive preliminary advice on the terms of the mortgage during the construction phase.

Why this matters

This new option can make buying property in Dubai more flexible. Buyers do not necessarily have to cover the entire amount with their own funds or be entirely dependent on the developer’s payment schedule.

For investors, this can be a way to use capital more effectively. Instead of investing the entire sum in a single property, part of the cost can be financed through a bank, leaving more funds available for other investment opportunities.

This can also be beneficial for buyers purchasing property as a primary residence. This is particularly true if someone is planning to move to Dubai, buy a family home, or wishes to secure a property in a prime location in advance.

What are the advantages of this approach?

A pre-construction mortgage gives the buyer greater financial flexibility. It allows them to consider not only completed properties but also new-builds from major developers.

The buyer can also join a project before it is completed. In some cases, property values rise as construction progresses, so buying at an earlier stage can be more advantageous than purchasing a completed property.

Furthermore, this format is particularly attractive for premium locations, where property prices are higher and it is important for the buyer to manage their financial burden effectively.

What factors should be taken into account

Despite the advantages, it is important to understand that a mortgage is not just a convenient tool, but a long-term financial commitment.

Not every project will be suitable for such terms. Even if the property is being built by a well-known developer, the bank will still assess it on a case-by-case basis.

You also need to take into account the interest rate, the loan term, the monthly repayment, fees, insurance and additional costs involved in finalising the transaction. For investors, it is particularly important to calculate not only the initial cost of entering the property but also the final return, taking all payments into account.

Before buying, it is worth comparing two options: the developer’s standard payment plan and purchasing with a mortgage. In some cases, an instalment plan may be more convenient, whilst in others, a mortgage will offer more flexibility.

What buyers should do

If you are considering buying a new-build property in Dubai with a mortgage, it is important to research the specific development first. You need to check whether mortgage financing is available, what stage of construction the project is at, how much you need to pay upfront, and which banks are willing to finance this property.

After that, it is worth obtaining preliminary bank approval and calculating all costs: the initial payment, monthly instalments, fees and additional mandatory charges.

The best course of action is to submit an application in advance to check your eligibility for financing. This will help you understand whether a pre-construction mortgage is suitable for you, what amount the bank is likely to approve, and what terms will be available specifically for your property.

A mortgage for new-build properties in Dubai can be a useful tool for buyers and investors. This is particularly true for projects by reputable developers such as Meraas and Nakheel, in popular locations like Bluewaters, City Walk, Port de La Mer, Palm Jumeirah and Dubai Islands.

However, it is important not to view this as an opportunity without restrictions. Typically, the buyer must already have paid around 50% of the property’s value, and construction must be approximately 30% complete.

This approach can offer greater flexibility, but before purchasing, you should carefully check the terms for the specific project, seek advice and calculate the financial model.

If you would like to find out whether off-plan financing is available for your chosen project, please submit an enquiry — we will check the terms and conditions for the property, assess your situation and advise you on the mortgage options that may be available.