Comparing a 3.27% two-year fixed mortgage quote in Dubai

F

far_finch

Homeowner
I’ve checked the headline rate, the loan-to-value band and the main fees, but I still can’t tell which quote is cheapest for my likely holding period. One Dubai offer is fixed at 3.27% for two years, for a property purchase around AED 1,798,000.

Would you compare the cash outlay through month 24 and the balance left at that point, or use the longer-term APR if there is a reasonable chance of retaining the mortgage? I’m also checking whether the loan can move with me, what happens when the fixed period ends, and the cost of repaying early. The advertised rate was more attractive until the fee structure and applicable LTV band were taken into account.
 
For a two-year fix, I would start with total cash paid over those two years: instalments, arrangement fees and any compulsory costs in the offer, minus the principal repaid. APR is useful, but it can obscure your likely holding period and whatever assumptions are made about the rate after year two. Keep the remaining balance at month 24 beside that calculation.
 
Is AED 1,798,000 the property price or the actual loan amount? Also, are all the quotes based on exactly the same down payment and repayment term? Without those details, the monthly payment and total interest comparisons will not be like-for-like. The loan-to-value tier may explain why the advertised rate was unavailable.
 
I would not dismiss APR entirely. A two-year cash-cost comparison can make the cheapest introductory deal look obvious while ignoring a poor reset rate or expensive exit. Run at least two cases: refinance at the end of the fixed period, and remain with the lender after the reset. The second case matters if refinancing is unavailable or unattractive then.
 
Portability needs careful wording. Ask what happens if you sell and buy another property during the fixed period: whether approval is reassessed, whether the new property must meet separate conditions, and which fees still apply. I would also request the early-repayment calculation in writing rather than relying on a general description. The exact UAE terms can vary by lender and offer.
 
One more practical step: put each quote into a simple month-24 table with upfront cash, monthly payment, total paid, principal repaid, remaining balance, early-exit cost and the stated post-fix rate. Then stress the reset payment at a higher rate to see whether it still fits your budget. That should expose whether 3.27% is genuinely competitive or merely the most attractive headline.
 
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