Rates & refinancing · 2 min read
Mortgage Refinancing in the UAE: When It Pays Off
Refinancing can cut your payments or release equity, but only if the savings outweigh the cost of switching.
By Trevio ·
What it costs to switch
- Early settlement — generally capped, commonly 1% of the outstanding balance up to AED 10,000.
- Valuation fee on the property.
- Mortgage registration — around 0.25% of the new loan.
- Trustee and de-registration charges, plus any bank arrangement fee.
Work out your break-even point
Divide your total switching costs by your monthly saving. The result is how many months until you're ahead. If you plan to sell before then, refinancing may not pay.
Rate versus term
A lower payment from a longer term isn't a real saving — you're spreading the same debt over more years. Compare total interest, not just the monthly figure.
When refinancing makes sense
- Your fixed period is ending and the reversion rate is high.
- Market rates have fallen meaningfully.
- You want to release equity for a goal.
- Your income or profile has improved.
When to hold off
If you're mid-fixed-period, penalties may outweigh savings. Sometimes negotiating with your current bank, or waiting, is the better move.
FAQs
Can I refinance to another bank?
Yes. This is often called a buyout.
Can I release equity?
Often, subject to LTV limits and the bank's assessment.
Will refinancing hurt my credit?
A new application involves a credit check, which is usually minor if done sensibly.
Wondering if it's worth it? Book a free consultation — we'll tell you honestly, including when not to refinance.