Published 15 June 2026 · Updated 15 June 2026

Mortgage payment holiday UAE: can you pause your payments?

By David Chen, Market Research Analyst · 8 min read

Do UAE banks offer mortgage payment holidays?

A payment holiday, as most people understand it, means a period of weeks or months where you make no mortgage payments and the bank formally agrees to suspend the schedule. In the UK, for example, lenders were required to offer 3-month payment holidays during the pandemic.

In the UAE, there is no standard product called a "payment holiday." UAE banks do not advertise this as a feature. What exists instead is a case-by-case restructuring process governed by the bank's internal policies and the CBUAE's Consumer Protection framework.

During an extreme event, this changes. During COVID-19 in 2020, the CBUAE issued emergency directives requiring banks to offer payment deferrals to customers who were financially impacted. This is the precedent that shows such relief is possible in the UAE system when regulators require it. Outside of a CBUAE-mandated program, you are dependent on your bank's willingness to restructure.

What the COVID-19 deferral precedent means for borrowers

In early 2020, the CBUAE launched the Targeted Economic Support Scheme (TESS). Under this program, UAE banks were required to allow eligible customers to defer loan repayments. Mortgages were included. The specific circular (CBUAE Circular 3645/2020) set out the conditions under which banks had to offer relief.

The practical effect: deferred payments were not forgiven. The missed payments were added to the loan balance, and the loan term or monthly payment adjusted accordingly. Interest (or profit, for Islamic mortgages) continued to accrue during the deferral period. The borrower paid more in total, but survived the short-term cash flow crisis.

This precedent is important because it shows the UAE regulatory framework can accommodate temporary payment relief when circumstances warrant it. For ordinary financial difficulty outside a crisis, the bank has discretion. But the CBUAE Consumer Protection function provides an escalation path if banks refuse reasonable requests unfairly.

What happens when deferred payments are added to your balance?

If a bank agrees to defer 3 monthly payments of, say, AED 8,000 each, those AED 24,000 do not disappear. They are capitalised into the outstanding balance. Your remaining loan balance increases by AED 24,000 plus any accrued interest during that period.

The bank then recalculates your monthly payment (if the term stays the same, the payment goes up slightly) or extends your term slightly to keep the payment similar. Either way, you pay more in total over the life of the loan. The deferral is a cash flow tool, not a cost reduction.

What restructuring options do UAE banks offer?

Outside of a crisis, banks can consider several forms of restructuring. None are guaranteed. Each requires a formal application, proof of financial hardship, and approval through the bank's credit team.

The most common outcome when a borrower requests relief is a term extension. This is the easiest for banks to approve because it lowers the payment without requiring any regulatory exception. The downside is that you pay substantially more interest over a longer period.

What to do if you cannot pay your UAE mortgage

Follow these steps in order:

1. Contact your bank before you miss a payment. Call the relationship manager or customer care line and explain your situation. Ask specifically about restructuring or temporary deferral options. Get the name and employee ID of who you spoke to.
2. Put the request in writing. Follow up any phone call with a written request (email or through the bank's secure message portal). Keep copies of all correspondence. Banks respond more formally and on record to written requests.
3. Provide documentation. Banks will ask for evidence of financial hardship: a salary reduction letter from your employer, proof of job loss, medical bills, or similar. Have this ready before you call.
4. Get any agreement in writing. Verbal promises are not binding. If the bank agrees to defer or restructure, insist on a formal letter or amended loan agreement before the next payment date. Do not rely on what a call centre agent said.
5. Escalate to the CBUAE if the bank refuses. If you believe the bank is being unreasonable, the CBUAE Consumer Protection function accepts complaints against licensed banks. File via the CBUAE website. Mention that you have already approached the bank directly and detail what happened.

What happens if you miss payments without an agreement

Missing payments without a formal restructuring agreement in place is a serious step in the UAE. The consequences escalate quickly:

The legal framework for mortgage enforcement in UAE

The CBUAE Mortgage Regulation (2013) sets the framework for residential mortgage lending. Under this framework, banks can seek enforcement if a borrower defaults. The process involves court action and can ultimately result in the property being repossessed and sold to settle the debt.

This is not quick in the UAE. Court processes take time. But the outcome is serious. If the property is sold at auction for less than the outstanding mortgage balance, the borrower can still owe the bank the remaining deficit. Understanding this makes the case for early contact and negotiation very clear: the cost of restructuring is almost always lower than the cost of default.

Refinancing as an alternative to a payment holiday

If your payment is unmanageable but not because of a temporary crisis (for example, rates have risen significantly since you took the mortgage), refinancing might solve the problem more permanently than a deferral. Refinancing means moving your mortgage to a new bank at a lower rate or longer term, which reduces your monthly payment.

Refinancing has costs: an early settlement fee (typically 1% of the outstanding balance, capped by CBUAE rules), plus new arrangement fees. But if the rate saving is significant or the term extension is large, refinancing can make financial sense. See our UAE refinancing guide for how to assess whether it is worth it.

Frequently asked questions

Can you get a mortgage payment holiday in the UAE?

Not as a standard product. UAE banks do not offer formal payment holidays. During COVID-19, the CBUAE mandated temporary deferrals. Outside of a CBUAE-directed program, any deferral or restructuring requires direct negotiation with your bank and is at their discretion. Contact the bank before missing a payment: options are much better at that stage.

What happens if you miss a mortgage payment in UAE?

A late payment fee applies immediately. A missed payment can be reported to the AECB credit bureau, damaging your credit score. After 3 consecutive missed payments, most UAE banks can begin legal proceedings. Foreclosure under UAE mortgage law can follow. Contact your bank before you miss a payment, not after.

What is mortgage restructuring in UAE?

Restructuring usually means a term extension (for example from 20 to 25 years, which cuts the monthly payment), a temporary interest-only period, or in rare cases a temporary rate reduction. Any restructuring must be in writing. Deferred payments are not forgiven: they are added to your loan balance and you pay them back later, with interest accruing throughout.

Can the CBUAE help if my bank refuses to restructure my mortgage?

Yes. The CBUAE Consumer Protection function accepts formal complaints against licensed UAE banks. If your bank refuses to engage with a reasonable restructuring request, file a written complaint with the CBUAE (via their website or consumer helpline). The CBUAE can investigate and intervene. Keep all written evidence of your request and the bank's response before filing.