Finance & Mortgage · 7 min · 2026-10-23

The 50% Off-Plan Mortgage Rule in the UAE: How It Works

Off-plan mortgages in the UAE are capped at 50% of the property value for every buyer. Here is what the rule says, why your own money goes in first, and how milestone payments work.

The short answer

In the UAE, a mortgage on a property bought off plan can cover at most 50% of the property value, whoever you are and whatever the price. This cap is set by the Central Bank of the UAE (CBUAE) in its "Regulations Regarding Mortgage Loans", Article 3.2 (C), which states that the maximum LTV for off-plan purchases is 50% "regardless of purpose, value, or category of purchaser". On top of that, Article 2.1 requires the lender to use your own equity first, and to release its money only against construction milestones that are physically confirmed by an independent party.

This guide explains both rules, then walks through a worked example on an AED 1,200,000 unit.

What Article 3.2 (C) actually says

For ready properties, the CBUAE sets different maximum loan-to-value (LTV) ratios depending on who you are and what you buy:

The off-plan line overrides all the others. The regulation explains the reason: the development process is long and carries a higher level of risk to completion. A first-time expatriate buyer who could borrow 80% on a ready apartment can borrow at most 50% on the same apartment bought off plan.

Remember also that these are maximums. Article 2.4 states that lenders should adopt more conservative ratios where risks are higher, so each lender sets its own policy within the cap.

Your 50% must come from your own resources

Article 2.4 adds that the down payment must be drawn from the borrower's own resources, not from personal loans or credit cards. In practice, this means you should plan your savings for the full equity part plus purchase costs before you sign.

Equity first: the rule in Article 2.1

Article 2.1 says that where stage payments are made as part of the financing, the lender "must first use owner's equity portion of the construction price to pay the developer/contractor before the mortgage loan provider provides any of the loan monies."

In plain terms:

• You pay your share (at least 50% under the cap) to the developer first.
• Only once your share has been paid does the lender start paying.
• The lender then pays the developer in stages.

Milestones confirmed by an independent party

The same article requires payments to the developer to be based on prescribed completion milestones, physically confirmed either by the lender or by a qualified professional agent who is independent from both the borrower and the developer. Article 4 also requires the loan documentation to list "the milestones required for progress payments in case of properties under construction".

So before signing, read two documents side by side: the developer's payment plan in your sales agreement and the lender's disbursement schedule. They must fit together.

Worked example: AED 1,200,000 off-plan unit

Assume an expatriate buys an off-plan apartment at AED 1,200,000 with an example developer payment plan. The plan percentages below are an illustration only, not a specific project's terms.

The buyer's AED 600,000 covers the first four stages. The lender's AED 600,000 (50%) is released for the last two stages, each time after the milestone is checked.

The monthly payment on AED 600,000

Using the formula monthly payment = P·r / (1 − (1 + r)^−n), with P = 600,000, an example rate of 4.5% (r = 0.045 / 12) and n = 300 months (25 years, the maximum term under Article 3.3):

Article 3.1 requires the lender to stress test your debt burden ratio at 2 to 4 percentage points above the rate on the loan, and the total of your monthly debts must stay within 50% of your income.

Add the purchase costs

On top of your 50%, budget for the Dubai Land Department fees: the 4% transfer fee (AED 48,000 here, usually paid by the buyer in practice), mortgage registration at 0.25% of the loan (AED 1,500 here) plus admin fees, and the lender's own fees, which each lender sets and must disclose under Article 4.

Practical checklist

• Confirm the developer's plan reaches at least 50% before the lender has to pay.
• Ask your lender how it confirms each milestone and who the independent inspector is.
• Ask how interest is charged while the loan is drawn in stages during construction; each lender sets its own terms.
• Keep your equity in your own savings; borrowed money cannot fund it (Article 2.4).
• Read the full guide to off-plan mortgage rules.

FAQ

Can I borrow more than 50% on an off-plan property?

Not under the CBUAE regulations. Article 3.2 (C) caps off-plan mortgages at 50% for all buyers, whatever the purpose or value. At handover, the remaining balance can be financed based on the ready property; see mortgage at handover.

Does the 50% apply to UAE Nationals too?

Yes. The text says "regardless of purpose, value, or category of purchaser", so UAE Nationals and expatriates are treated the same for off-plan.

Why does the lender pay only after my equity?

Article 2.1 requires the owner's equity to be used first, so the borrower has a real financial interest in the property before any loan money is released.

Can the developer's plan be faster than construction?

The lender's payments follow independently confirmed milestones. If the plan asks for money before a milestone is confirmed, that part falls on you. Compare plan and mortgage in payment plan vs mortgage.

Run your own numbers with the off-plan calculators or test your loan size with the LTV calculator.

Calculators for this guide: Mortgage calculator Dubai & UAE · Dubai mortgage for non-residents · Off-plan calculator Dubai

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