Mortgage Upfront Fees in the UAE: How to Save and Make Your Funds Go Further

Buying a home in the UAE is exciting, but it comes with more than just the down payment and monthly installments. Many first-time buyers are surprised by mortgage upfront fees—the extra costs you need to pay before your mortgage is finalized. These fees can add up quickly and, if not planned for, may stretch your budget.

The good news? With careful preparation and smart planning, you can manage and even reduce your upfront costs. This guide explains the most common mortgage upfront fees in the UAE, how much they typically cost, and tips to help you save money while keeping your homeownership journey smooth.

What Are Mortgage Upfront Fees?

Mortgage upfront fees are the charges you need to pay at the start of your property purchase, usually before or at the time your mortgage is approved. These include government fees, bank charges, insurance, and other related costs.

Unlike your monthly mortgage repayment, which is spread out over many years, upfront fees are one-time payments. They can total anywhere between 5–7% of the property price, depending on the bank and the property value.

Common Mortgage Upfront Fees in the UAE

Here’s a breakdown of the main upfront fees you should prepare for:

1. Down Payment

• •What it is: The percentage of the property price you pay upfront.
  
  
• •How much: For expats, the minimum is 20–25% of the property value. For UAE nationals, it can be as low as 15%.
  
  
• •Example: If you’re buying a property worth AED 1,000,000, you’ll need to pay at least AED 200,000 upfront as the down payment.
  
  

2. Mortgage Registration Fee

• •What it is: A fee charged by the Dubai Land Department (DLD) or Abu Dhabi Municipality to register your mortgage.
  
  
• •How much: Typically 0.25% of the loan amount, plus an admin fee (around AED 290).
  
  

3. Property Registration Fee

• •What it is: The cost of registering your property with the Land Department.
  
  
• •How much: Usually 4% of the property price in Dubai, plus admin fees.
  
  

4. Bank Arrangement Fee

• •What it is: Charged by the lender to process your mortgage application.
  
  
• •How much: Typically 1% of the loan amount, plus 5% VAT.
  
  

5. Property Valuation Fee

• •What it is: A fee for the bank to carry out an independent property valuation.
  
  
• •How much: Between AED 2,500–3,500, depending on the bank.
  
  

6. Life Insurance

• •What it is: Required by banks to cover the mortgage in case of death.
  
  
• •How much: Varies based on loan size, age, and health condition. Typically 0.2–0.5% of the loan amount per year.
  
  

7. Home Insurance

• •What it is: Required to protect the property against fire and damage.
  
  
• •How much: Usually AED 1,000–2,000 annually.
  
  

Why Mortgage Upfront Fees Matter

Understanding and budgeting for mortgage upfront fees is essential because:

• •They impact your cash flow.
  
  
• •You can’t move forward without paying them.
  
  
• •They affect your total affordability.
  
  

For example, if you save AED 250,000 for a down payment, you might need an additional AED 50,000–70,000 to cover upfront costs. Not factoring these in can delay your home purchase.

Tips to Save on Mortgage Upfront Fees in the UAE

Managing mortgage upfront fees doesn’t mean cutting corners—it’s about being strategic. Here are practical tips to make your funds go further:

1. Compare Bank Arrangement Fees

Some banks charge the full 1% fee, while others offer discounts or promotions. Shopping around can save you thousands.

2. Negotiate with Your Lender

Don’t be afraid to ask if fees can be reduced, waived, or rolled into the loan amount. Some lenders may agree, especially if you have a strong profile.

3. Use a Mortgage Broker

Mortgage brokers often have access to exclusive deals with reduced fees. They can also help you compare offers and avoid hidden charges.

4. Plan for Registration Costs Early

Since property and mortgage registration fees are mandatory, set aside funds for them as part of your savings goal, not just the down payment.

5. Bundle Insurance with Your Bank

In some cases, taking life or home insurance through your bank can be cheaper. However, always compare with independent providers.

6. Take Advantage of Promotions

Some banks run limited-time promotions where valuation or processing fees are discounted. Staying informed can save you money.

7. Consider Property Developers’ Incentives

Many developers in the UAE offer to cover part of the DLD fees or provide discounts on registration charges. This can significantly reduce upfront costs.

8. Avoid Late or Repeat Applications

If your valuation expires or your application needs resubmission, you may need to pay fees again. Keeping your documents ready and timelines in check prevents extra costs.

9. Factor in Exchange Rates if Paying from Abroad

If you’re transferring funds internationally, choose the right time and method to minimize currency conversion costs.

10. Create a Dedicated Savings Plan

Set aside 5–7% of your target property price specifically for fees. This way, you won’t dip into your emergency savings when the time comes.

Example: Breaking Down Upfront Costs

Imagine you’re an expat buying a property in Dubai worth AED 1,000,000 with a mortgage:

• •Down payment (20%): AED 200,000
  
  
• •Property registration (4%): AED 40,000
  
  
• •Mortgage registration (0.25%): AED 2,500
  
  
• •Bank arrangement (1%): AED 8,000
  
  
• •Valuation fee: AED 3,000
  
  
• •Life insurance (annual): AED 2,500
  
  
• •Home insurance (annual): AED 1,200
  
  

Total upfront costs = AED 257,200

Planning for this amount in advance avoids last-minute surprises.

Buying a home in the UAE involves more than just saving for the down payment. Mortgage upfront fees are a reality every buyer must account for, but with the right strategies, you can reduce their impact and keep your finances in check.

By comparing banks, negotiating fees, leveraging promotions, and planning ahead, you can make your funds go further and achieve your homeownership goals with confidence.

If you’re unsure how to calculate or budget for these costs, working with a mortgage advisor can help you navigate the process smoothly.