How to massively increase your borrowing capacity

For most homebuyers saving their deposit is the biggest hurdle to home ownership. Here is how you can stretch your deposit to buy a bigger and better home.

Most borrowers in the UAE are not aware that there are mortgages available that allow you to add most of the borrowing and purchase costs to your home loan. In practice this significantly increases your borrowing capacity.

Here is a case study to show the effect of adding purchase costs to your home loan

A client holds cash of AED 800k. Subject to them having a suitable income, a cash deposit of this size would allow them to purchase a property worth approximately AED 2.5m:

Purchase price AED 2,500,000
Down payment needed 25% AED 625,000
DLD fee 4% AED 100,000
Agent fee 2% AED 50,000
DLD fees (Miscellaneous) AED 9,568
Valuation fee (approx.) AED 3,150
Total Cash Required   AED 787,718

Calculate your mortgage

Use our mortgage calculator to work out how much adding purchase costs to your mortgage could increase your budget by.

By adding 3% of the DLD fee and 1.5% of the agent’s fee to the mortgage, the out-of-pocket purchase costs would be reduced massively. That saved money can be used to increase the size of your 25% deposit thereby increasing your budget for your dream home to AED2.95m. An increase of AED450k.

Purchase price AED 2,950,000
Down payment 25% AED 737,500
DLD fee 1% AED 29,500
Agent fee 0.50% AED 14,750
DLD fees (Miscellaneous) AED 9,568
Valuation fee (approx.) AED 3,150
Total   AED 794,468

Where in the first scenario the maximum purchase price is AED 2.5m, by adding the fees of 4.5%, this increases to an incredible AED 2.95m, an uplift of 18%! This clearly has massive benefits, allowing you to buy a bigger property, or in buy in a better location.