UAE mortgage refinance calculator: how much could switching save you?
- Switching an AED 1,500,000 loan with 20 years left from 4.99% to 3.89% saves AED 888/month, AED 10,656/year, and AED 213,120 over the term.
- Switching costs run AED 17,040 to AED 32,040 on an AED 1.5M balance, and the AED 24,540 midpoint gives a break-even of about 28 months.
- A rate gap of 0.75% or more usually makes refinancing worthwhile if you plan to keep the property for at least 3 years.
Refinancing means moving your mortgage to a bank offering a lower rate. The saving depends on the rate gap and your balance. Switching a AED 1,500,000 loan with 20 years left from 4.99% to 3.89% saves AED 888/month, AED 10,656/year, and AED 213,120 over the term. After about AED 24,540 in switching costs, the midpoint of a AED 17,040 to AED 32,040 range, you break even in roughly 28 months. As a rule, a rate gap of 0.75% or more is worth it if you'll keep the property at least 3 years. The calculator below runs your numbers.
UAE mortgage refinance calculator
Calculator uses reducing-balance amortisation. The outstanding balance and remaining term should match your current bank statement. Switching costs default to AED 24,540, the midpoint of a AED 17,040 to AED 32,040 range (AED 10,000 early settlement cap + ~AED 4,040 new mortgage registration + AED 0 to AED 15,000 processing at 0% to 1% + AED 3,000 valuation on a AED 1.5M balance). Adjust the costs slider to your actual quote. Source: MortgageCompare.ae.
How does mortgage refinancing work in the UAE?
Refinancing (also called a buyout or balance transfer) is when a new bank pays off your existing mortgage and you continue paying the new bank at a better rate. Your property, your title deed, and your remaining balance stay the same. Only the lender and the rate change. It is one of the most underused money-saving moves for UAE homeowners, because many people lock in a fixed rate, let it revert to a higher variable rate, and never review it.
The process takes 4 to 6 weeks. The new bank values your property, approves you against current income and CBUAE rules, settles your old loan, and registers the new mortgage at the Land Department. You keep making monthly payments throughout; there is no gap in cover. The saving comes purely from the lower rate applied to your outstanding balance for the rest of the term.
The single biggest trigger to refinance is the end of your fixed period. Fixed terms in the UAE run from 1 year up to 20 years, and when yours ends the rate reverts to EIBOR plus your bank's margin. The 3-month EIBOR is 4.37% on the 22 September 2026 reference table, so a loan reverting at 3-month EIBOR + 1.75%, which is 6.12% today, costs a lot more than a fresh fix. A new customer can fix at 3.78% conventionally (Arab Bank, 2 years, salary transfer required) or 3.75% on Islamic finance (Sharjah Islamic Bank, 1 year). That gap is what refinancing captures.
How much can you save by refinancing?
The saving scales with two things: how big the rate gap is, and how much you still owe. Here is what different new rates do for a borrower currently on 4.99% with a AED 1,500,000 balance and 20 years remaining.
| Switch to | Rate gap | New monthly payment | Monthly saving | Saving over 20 years |
|---|---|---|---|---|
| 3.75% (lowest Islamic, Sharjah Islamic Bank) | 1.24% | AED 8,893 | AED 998 | AED 239,520 |
| 3.78% (lowest conventional, Arab Bank) | 1.10% | AED 9,003 | AED 888 | AED 213,120 |
| 3.99% | 1.00% | AED 9,082 | AED 809 | AED 194,160 |
| 4.25% | 0.74% | AED 9,289 | AED 603 | AED 144,720 |
| 4.50% | 0.49% | AED 9,490 | AED 401 | AED 96,240 |
AED 1.5M balance, 20 years remaining, reducing balance. Saving over 20 years is before switching costs and assumes the new rate runs the whole term. It won't: 3.89% is a 2-year fix that needs salary transfer, and 3.75% is a 1-year fix, so both revert to a variable rate when the fix ends. Rates verified 22 September 2026. Source: MortgageCompare.ae calculator. New rates from our rate tracker.
Even the smallest gap in the table (0.49%) saves nearly AED 100,000 over the term. The total saving figures are before costs, so subtract your switching costs (AED 17,040 to AED 32,040 on this balance) to get the net benefit. The lifetime numbers are large because a small rate cut applies to a big balance for a long time.
What does it cost to refinance in the UAE?
Refinancing is not free, and the costs are what decide whether a small rate gap is worth chasing. Here is the typical breakdown on a AED 1.5M balance.
| Cost | Amount | Notes |
|---|---|---|
| Early settlement fee (old bank) | AED 10,000 | CBUAE caps this at 1% of the balance or AED 10,000, whichever is lower (source: CBUAE). On balances above AED 1M the AED 10,000 cap applies. |
| New mortgage registration | AED 4,040 | 0.25% of the loan plus AED 290 admin at the Dubai Land Department. |
| Bank processing fee | AED 0 to AED 15,000 | 0% to 1% of the loan. Several lenders currently waive it, and a broker will usually push it down for you. |
| Property valuation | AED 3,000 | The new bank revalues your property before approval. |
| Total switching cost | AED 17,040 to AED 32,040 | The processing fee is the entire spread. A waiver takes AED 15,000 straight off the top. |
Indicative costs on a AED 1.5M balance. The AED 24,540 used by the calculator above and the break-even table below is the midpoint of that range. Early settlement cap source: CBUAE. Mortgage registration source: Dubai Land Department. Always get a full cost quote in writing before committing.
Ask about fee waivers before you assume the cost. Refinancing is a competitive part of the UAE market, and banks regularly waive the processing fee or contribute toward your switching costs to win the balance transfer. Some cover the valuation too. A processing waiver takes up to AED 15,000 off and cuts the break-even period by months. Always ask what the bank will contribute before you treat AED 24,540 as fixed.
The break-even point: the number that decides it
The break-even point is how long it takes for your monthly savings to repay the switching costs. The maths is simple: total switching costs divided by the monthly saving. On the default scenario, AED 24,540 divided by AED 888 is 27.6 months, a bit over 2 years.
The rule of thumb: if you plan to keep the property and the mortgage longer than the break-even period, refinancing saves you money. Here is how the break-even shifts with the rate gap on a AED 1.5M balance.
| Rate gap | Monthly saving | Switching cost (midpoint) | Break-even | Worth it if you stay... |
|---|---|---|---|---|
| 1.10% | AED 888 | AED 24,540 | 28 months | 2.5+ years |
| 1.00% | AED 809 | AED 24,540 | 30 months | 2.5+ years |
| 0.74% | AED 603 | AED 24,540 | 41 months | 3.5+ years |
| 0.49% | AED 401 | AED 24,540 | 61 months | 5+ years |
AED 1.5M balance, 20 years remaining. Break-even = switching cost / monthly saving, using the AED 24,540 midpoint. A waived processing fee drops the cost to AED 17,040 and shortens every row. Source: MortgageCompare.ae calculator.
This is why a 0.75% gap is the usual cutoff. Below that, the break-even stretches past 3 to 5 years, which only works if you are certain you'll keep the property and not settle early. Above it, the maths is comfortable for most owners. If you can negotiate a processing fee waiver, the break-even shortens significantly and a smaller gap becomes worth chasing.
When refinancing is worth it, and when it isn't
Refinance when:
- Your fixed period is ending and the rate is about to revert to EIBOR plus your bank's margin, while a new fix starts at 3.78% conventional or 3.75% Islamic.
- The rate gap is 0.75% or more and you plan to keep the property at least 3 years.
- You're already on a variable rate paying well above the current best rate, with no early settlement penalty.
- A bank offers a fee waiver that shortens your break-even to under 2 years.
Think twice when:
- You might sell or settle the mortgage before the break-even point.
- You're still inside a fixed period with a break cost that exceeds the CBUAE settlement cap (check your offer letter).
- The rate gap is under 0.5% and no fees are waived, so break-even runs past 5 years.
- Your income or credit profile has weakened since the original approval, which could mean a worse rate or rejection.
If you also want to release equity (borrow more than your current balance against a higher property value), that is a different calculation governed by the same CBUAE loan-to-value limits as a new purchase. Our full refinancing guide covers buyout versus equity release in detail. To see what rate you'd actually qualify for, run the eligibility check and compare live offers on the rates page.
Frequently asked questions
How much can you save by refinancing a mortgage in the UAE?
It depends on the rate gap and balance. Switching a AED 1.5M mortgage with 20 years left from 4.99% to 3.89% saves AED 888/month, AED 10,656/year, and AED 213,120 over the term. After roughly AED 24,540 in costs, break-even is about 28 months. A gap of 0.75% or more usually pays off if you keep the property at least 3 years.
What are the costs of refinancing a mortgage in the UAE?
The early settlement fee (CBUAE-capped at 1% of the balance or AED 10,000, whichever is lower), new mortgage registration (0.25% of the loan plus admin in Dubai), the new bank's processing fee (0% to 1%), and a valuation (around AED 3,000). On a AED 1.5M balance these total roughly AED 17,000 to AED 32,000. Banks often waive the processing fee to win your business.
What is the break-even point on a mortgage refinance?
It is the number of months for your monthly savings to recover the switching costs: total costs divided by monthly saving. AED 24,540 / AED 888 = 27.6 months. If you keep the mortgage longer than the break-even period, refinancing saves money overall. If you might settle before then, it may not.
Should I refinance my UAE mortgage when the fixed rate ends?
Yes, the end of the fixed period is the best time, because your rate is about to revert to EIBOR plus margin, often higher than new-customer rates, and there is usually no early settlement penalty once you're variable. Compare your reversion rate against the best new rates a few months early, and start the process ahead of time since approval and valuation take 4 to 6 weeks.
Is refinancing the same as a mortgage buyout in the UAE?
The terms are used interchangeably. A buyout (balance transfer) is when a new bank pays off your existing mortgage and you continue with them at a better rate, the most common form of UAE refinancing. Equity release is different: you borrow more than your balance to take cash out, subject to the same CBUAE loan-to-value limits as a new purchase.
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See the rate you'd get by switching
The calculator shows the saving. The eligibility check shows which banks would take on your balance transfer, and at what rate, so you can see your real numbers before applying.