RERA Mortgage & Finance in Dubai Real Estate 1 — Questions and Answers
Question 1: What is the maximum LTV ratio permitted for a UAE national purchasing their first residential property valued at AED 3 million?
- 70%
- 75%
- 80% (Correct answer)
- 85%
Correct answer: 80%
UAE Central Bank regulations allow UAE nationals up to 80% LTV for a first residential property valued at AED 5 million or less.
Question 2: What is the maximum LTV ratio for a non-UAE national purchasing their first residential property in Dubai valued at AED 4 million?
- 60%
- 65%
- 70%
- 75% (Correct answer)
Correct answer: 75%
Non-UAE nationals are permitted a maximum LTV of 75% for first residential property purchases valued at AED 5 million or less under UAE Central Bank regulations.
Question 3: What is the Dubai Land Department (DLD) fee for registering a mortgage on a property?
- 0.50% of mortgage value + AED 580
- 0.25% of mortgage value + AED 290 (Correct answer)
- 1% of property value + AED 500
- 0.25% of property value + AED 580
Correct answer: 0.25% of mortgage value + AED 290
The DLD charges 0.25% of the mortgage loan amount plus AED 290 in administrative fees for mortgage registration.
Question 4: Which authority issued the regulations governing maximum LTV ratios for residential property mortgages in the UAE?
- Dubai Land Department (DLD)
- RERA
- UAE Central Bank (Correct answer)
- Ministry of Economy
Correct answer: UAE Central Bank
The UAE Central Bank issued the mortgage regulations that set LTV limits for residential property purchases across all UAE emirates.
Question 5: What is the maximum LTV for any buyer — regardless of nationality — purchasing a second residential property in Dubai?
- 50%
- 60% (Correct answer)
- 65%
- 70%
Correct answer: 60%
UAE Central Bank regulations cap LTV at 60% for all buyers, UAE nationals and expats alike, when purchasing a second residential property.
Question 6: What is the maximum LTV permitted when financing the purchase of an off-plan property in Dubai?
- 40%
- 50% (Correct answer)
- 60%
- 65%
Correct answer: 50%
Off-plan properties carry higher pre-construction risk, so the Central Bank limits financing to a maximum of 50% LTV for all buyer categories.
Question 7: In an Islamic mortgage structure known as Diminishing Musharaka, how does the buyer eventually acquire full ownership of the property?
- By paying a lump sum at end of term
- Through gradual purchase of the bank's equity share over time (Correct answer)
- By renting the property from the bank until ownership transfers
- Through assignment of the bank's interest to a third party
Correct answer: Through gradual purchase of the bank's equity share over time
In Diminishing Musharaka, the buyer and bank co-own the property, and the buyer progressively purchases the bank's equity share until full ownership is achieved.
RERA Mortgage & Finance in Dubai Real Estate 1
What is the maximum LTV ratio permitted for a UAE national purchasing their first residential property valued at AED 3 million?