By Danyal Szoke, Head of Sales · Published 8 June 2026 · Updated 24 September 2026 · 9 min read · Rates refreshed 5 October 2026

1-year fixed rate mortgage UAE 2026: who offers the lowest and is it right for you?

What "1-year fixed" means on a UAE mortgage

In the UAE, no bank offers a mortgage fixed for its full 25-year term. Instead, you get an introductory fixed period, typically 1, 2, 3, or 5 years. The 1-year fixed is the shortest available and usually gives the lowest rate, because the bank takes on less rate risk over a shorter commitment.

After 12 months, your mortgage automatically reverts to a variable rate calculated as EIBOR plus the bank's fixed margin. That margin is set when you take out the mortgage and does not change for the life of the loan. Two things decide the follow-on, then, and neither of them is the headline: the margin, and which EIBOR tenor the facility tracks. Most UAE lenders use the 3-month rate, which was 4.30% on the 5 October 2026 fixing. Emirates NBD and ADIB use the 1-month rate, 4.09% on the same fixing.

1-year fixed rates by lender

The table below shows published 1-year introductory rates from the UAE lenders where we can source a genuine 1-year product, ranked from lowest to highest. All rates are for salaried borrowers buying a first residential property under AED 5 million with a 20% deposit.

Monthly payments for AED 1.5M loan, 25-year term, reducing-balance amortisation at the introductory rate. Published rates for salaried first-property buyers, 20% deposit, loan under AED 5M. Every lender here except HSBC requires salary transfer. Sharjah Islamic Bank and FAB charge no arrangement fee, Commercial Bank of Dubai charges 0.26%, HSBC 0.52% and United Arab Bank 0.525%. HSBC prices by relationship tier: 4.05% is the Private, Premier and Advance rate, and Personal Banking is 4.55%. Rates read from lender product records on 22 September 2026. Actual rates depend on borrower profile.

The monthly payment gap between the cheapest and dearest 1-year option on a AED 1.5M loan is AED 961 a month, or AED 11,532 across the 12-month introductory period. Roll that decision 3 times and it is AED 34,596.

United Arab Bank (UAB) and FAB, 0.10 points apart, are the pair worth reading twice. UAB's 3.89% costs AED 7,827 a month in the intro year against FAB's AED 7,909, a saving of AED 82 a month, or AED 984 over the year. Then they part company. FAB reverts to 3-month EIBOR + 1.50% and charges no arrangement fee. UAB reverts to 3-month EIBOR + 1.79% and charges 0.525%, which is AED 7,875 on a AED 1.5M loan, 8 times the intro-year saving. On the 5 October 2026 fixing that is a reversion of 5.70% against 5.99%, so the cheaper headline costs AED 262 a month more once the fix ends.

Three lenders that often turn up in 1-year comparisons do not belong in that table. Dubai Islamic Bank's standard salary-transfer product is 4.10%, but it fixes for 3 years and that is the only term offered. ADCB's fixed home loan is 4.13% and we have not confirmed the fixed period behind it, so it stays out until we can. National Bank of Fujairah's 4.25% is its 5-year bundle offer with salary transfer, written conventional or Islamic, read 22 September 2026. Nor do Arab Bank and Emirates NBD, whose fixes start at 2 years, or Standard Chartered, which has offered no fixed rate since 18 September 2026.

One more thing the table does not show. The cheapest conventional rate anywhere in the market is 3.89%. Emirates NBD charges it on a 2-year fix, and United Arab Bank matches it on a 1-year. The Islamic floor of 3.75% now sits below it, which reverses the order these comparisons carried through the first half of 2026. If you are shopping purely on the front rate, the short fix no longer undercuts the 2-year on the conventional side.

The case for a 1-year fix right now

With the CBUAE base rate at 3.65% and the US Federal Reserve still considering further rate cuts, many UAE borrowers are deliberately choosing 1-year fixes to keep their options open. Here is why that makes sense:

• Usually the lowest intro rate. A short fix normally starts lower, because the bank carries less rate risk. On a AED 1.5M loan, a 1-year fix at 3.75% instead of 4.05% on a longer fix saves AED 247 a month while the intro rate lasts. It is not a rule, though: Commercial Bank of Dubai charges 4.89% for its 1-year fix and 3.99% for its 3-year, and the conventional floor across the market, 3.89%, is Emirates NBD's 2-year fix.
• Flexibility to refinance. After 12 months you can approach other lenders and secure a new introductory rate, effectively rolling from one deal to the next. This "roll strategy" lets you capture rate cuts as they happen rather than being locked into a longer fixed period.
• EIBOR may fall. If EIBOR drops by 0.50% during 2026, reversion rates after your 1-year fix would be 0.50% lower than the figures on this page, which use the 5 October 2026 fixing. A shorter fix means you could refinance sooner and lock in a new, lower starting rate.

The risks of a 1-year fix

A 1-year fix is not always the right choice. There are genuine downsides:

• Rate uncertainty after 12 months. If EIBOR rises during your intro year, your reversion rate ends up higher than the 5 October 2026 figures. You would need to refinance quickly or absorb higher payments.
• An early settlement fee applies whenever you refinance. CBUAE rules cap it at 1% of the outstanding balance or AED 10,000, whichever is lower, and that cap runs for the whole term rather than expiring at year 3. So switching after year 1 typically costs up to AED 10,000, plus any arrangement fee at the new lender. Some lenders waive it under their own buyout terms.
• Refinancing takes time and paperwork. Each buyout requires a new application, valuation, and DLD mortgage registration. It typically takes 4 to 6 weeks and requires up-to-date documents. You need to start the process at least 2 months before your intro period ends to avoid a gap.
• No rate certainty for budgeting. If your income is variable or tight, a 1-year fix followed by uncertainty about the next deal can make budgeting harder than a 3-year fix that locks in payments for longer.

How to refinance at the end of the year

Refinancing (a mortgage buyout) at the end of a 1-year intro period follows the same steps as applying for any mortgage. Start about 8 weeks before your intro period expires:

1. Compare current market rates. Use the rates comparison page to see which lenders are offering the best introductory rates at the time. Rates change quarterly.
2. Apply for a new pre-approval. Get an in-principle letter from 2 or 3 lenders. This takes 2 to 5 working days and does not damage your AECB score if done within a short window.
3. Request a settlement figure. Ask your current lender for an early settlement letter, which shows the outstanding balance and any exit fees. At this stage you will know the AED 10,000 exit fee cap applies.
4. New valuation. The new lender commissions a valuation. If the property value has risen, your new LTV may be lower, which sometimes unlocks a better rate.
5. Complete the transfer. The new lender settles the old mortgage directly. You sign a new facility agreement and pay the DLD mortgage registration fee (0.25% of the loan, plus AED 290) on the new loan.

The total cost of switching: up to AED 10,000 exit fee, plus approximately AED 3,500 to AED 5,000 in valuation and new mortgage registration fees. On a AED 1.5M loan with 24 years left to run, a 0.30% cut in the intro rate is worth AED 244 a month, so chasing that alone takes roughly 5 years to earn the switching cost back. The saving that justifies the move is avoiding reversion. Dropping from a 5.30% reversion rate to a fresh 3.99% intro rate takes the payment from AED 9,215 to AED 8,102, about AED 1,110 a month, which covers the switching cost inside 14 months.

1-year vs 2-year vs 3-year fix: a direct comparison

Rate premiums for longer fix periods against the same lender's 1-year rate, for the lenders in the 1-year table above, read 22 September 2026. Commercial Bank of Dubai runs the other way and sits outside these ranges: its 3-year at 3.99% and its 5-year at 4.19% both undercut its own 1-year at 4.89%. Actual premiums vary by lender and market conditions. Source: MortgageCompare.ae analysis.

What the reversion rate looks like after your 1-year fix

After 12 months, every borrower on a 1-year fix faces a rate reset. Here is what that reset looks like at a 3-month EIBOR of 4.30%, by lender:

Monthly payment at reversion assuming AED 1.5M loan, 24 years remaining after year 1, reducing-balance amortisation. Commercial Bank of Dubai's margin is 1.69% below 50% LTV. EIBOR is variable; if EIBOR falls by 0.50%, each reversion rate and payment falls by the same 0.50% and the corresponding amount. Source: MortgageCompare.ae calculator.

The jump from intro to reversion is significant. First Abu Dhabi Bank moves from 3.99% to 5.70%, which adds AED 1,660 a month on a AED 1.5M loan if you sit on the reversion. United Arab Bank moves further, from 3.89% to 5.99%, an extra AED 2,004 a month. The cheapest conventional headline and the joint-dearest follow-on can sit inside the same facility, which is why most UAE borrowers refinance at the end of each introductory period rather than let the reversion run.

Who should choose a 1-year fixed mortgage in the UAE

A 1-year fix suits you if:

• You want the lowest possible starting rate and are confident you will refinance at the end of the year.
• You believe EIBOR may fall over the next 12 months and want to capture a lower reversion rate when you next refinance.
• You are buying an investment property and value flexibility over payment stability.
• Your income is stable and you can absorb some rate uncertainty after month 12.

A 1-year fix is less suitable if:

• You find the refinancing process stressful or administratively difficult and would prefer to set payments and forget them for a few years.
• Your income is variable and you need payment certainty for budgeting.
• You think EIBOR will rise over the next year, making your reversion rate higher than the figures worked from the 5 October 2026 fixing.
• You plan to sell the property within 2 to 3 years and want to minimise switching costs.

Frequently asked questions

What is the best 1-year fixed rate mortgage in the UAE in 2026?

The lowest 1-year fixed rate is 3.75% from Sharjah Islamic Bank, an Islamic product with a 0% arrangement fee. The cheapest conventional 1-year fix is 3.89% from United Arab Bank, but First Abu Dhabi Bank at 3.99% is the better of the two once you weigh the reversion and the fee. Then HSBC at 4.05% for Private, Premier and Advance customers, then Commercial Bank of Dubai at 4.89%. See our rates comparison page for the full current table.

Is a 1-year fix better than a 3-year fix in the UAE right now?

For borrowers who expect EIBOR to fall or hold flat over the next year, and who are willing to refinance, a 1-year fix is typically the better choice in the current market. For those who value certainty and want to avoid the paperwork of annual refinancing, a 3-year fix costs a little more but saves time and stress.

Can I refinance after 1 year without an exit fee?

No. CBUAE rules cap the early settlement fee at 1% of the outstanding balance or AED 10,000, whichever is lower, and that cap applies for the whole term. Switching after year 1 is possible but typically triggers the fee. Whether it still applies later is set by your facility agreement, not by a 3-year rule, so read the early settlement clause before you budget for a buyout.

What happens to my rate after the 1-year fixed period?

After 12 months your mortgage reverts to EIBOR plus the margin agreed at origination. At a 3-month EIBOR of 4.30%, reversion rates run from 5.29% (HSBC, margin 1.09%) to 5.99% (United Arab Bank, margin 1.79%). You can refinance to a new lender at any point, subject to the exit fee rules above.

Do all UAE banks offer 1-year fixed rate mortgages?

Many do, but not all. Sharjah Islamic Bank, United Arab Bank, FAB, HSBC and Commercial Bank of Dubai all publish a 1-year introductory rate. Others start longer: Arab Bank and Emirates NBD start at 2 years, Dubai Islamic Bank fixes its standard salary-transfer product for 3 years, with 3 and 5-year terms the only options, and ADIB starts at 3 years. Standard Chartered offers no fixed rate at all. Check the product sheet or ask your broker before you assume a 1-year fix is available.