All Dubai property buyers securing mortgages after February 1, 2025 must pay an initial 6% of the purchase price upfront, following a new directive from the Central Bank of the UAE. The regulation requires buyers to cover both the 4% Dubai Land Department (DLD) registration fee and the 2% real estate brokerage commission out of pocket — costs that banks were previously allowed to roll into mortgage financing.
What the UAE Central Bank Rule Requires
Under the new Central Bank rules, lenders can no longer include DLD registration fees or agent commissions as part of a property mortgage. Both charges must be settled directly by the buyer before the transaction closes. For a property valued at AED 1,000,000, that means setting aside an additional AED 60,000 in cash, entirely separate from the standard down payment.
Down payment requirements remain unchanged: buyers purchasing properties priced below AED 5,000,000 must contribute 20% equity, while those buying above that threshold are required to put down 30%.
Impact on Dubai Property Buyers
The change will hit secondary market buyers hardest. Previously, these costs could be bundled into the mortgage, reducing the liquid cash a buyer needed at the point of sale. Under the updated rules, buyers must have substantially larger cash reserves available before proceeding.
For a AED 2,000,000 apartment in the secondary market, a buyer now needs to budget for the 20% down payment (AED 400,000) plus AED 120,000 in upfront fees — a combined cash requirement of AED 520,000 before any additional closing costs.
Off-Plan Properties May Benefit
The market transition is expected to shift some buyer demand toward off-plan real estate. Developers frequently offer more flexible payment structures with lower initial commitments, and many provide incentives such as DLD fee waivers or deferred payment plans that spread costs over the construction period. These features become significantly more attractive when the secondary market demands such high upfront cash outlays.
Preparing for the New Mortgage Rules
Prospective buyers and investors should review their financing plans ahead of any purchase. Key steps include:
- Confirming liquid funds cover both the down payment and the full 6% in fees before applying for a mortgage - Asking developers directly whether DLD fee waivers or payment plan incentives are available on off-plan units - Factoring in additional fixed costs: the DLD Trustee fee (AED 4,200), mortgage registration fee (0.25% of the loan amount), and title deed fee (AED 500)
The Central Bank directive is designed to reduce over-leveraging in the property market and encourage more financially stable mortgage borrowing across the UAE. Buyers who plan ahead will be best positioned to navigate the updated landscape.
