Rapid growth in mortgage sector in UAE

DUBAI - The mortgage sector or home finance business in the UAE has increased tremendously as the current real-estate boom has induced banks to take the initiative and sponsor home loans for nationals as well as expatriates.

By Moushumi Das Chaudhury

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Published: Sat 10 Apr 2004, 9:35 AM

Last updated: Thu 2 Apr 2015, 11:35 AM

Moreover, Dubai offers various facilities, including no income tax, no stamp duties and no tax from income earned from a house has encouraged investors to invest in property and save money on rents.

Prominent banks like, HSBC, Mashreqbank and National Bank of Ras Al Khaimah have entered the arena of home finance and offer various options both for nationals and the expatriates. According to a senior official of HSBC bank, the bank started their mortgage business due to huge customer demand. The bank will provide loans that will cover about 70 per cent of the cost of the property and an higher amount may be possible but it will depend on age, income and type of property. Anyone applying for home finance shoud have an account with HSBC bank and also furnish details of his other accounts in his home country, the mortgage amount should be repaid within 25 years term and by the 60th birthday.

Apart from this, for home loan, HSBC bank will offer variable rate of interest and will give discount to the customers who agree to transfer their salaries to the bank. Presently, HSBC bank is offering Mortgage offers for the projects which includes The Palm-Jumeirah and Jebel Ali, Garden View Villa's, Palm Terrace Developments on the Palm to name a few.

Mashreqbank home finance also has various features alongwith a competitive interest rate of 6.49 per cent, down payment between 20 to 30 per cent and its home loans are available for people earning medium to high salary, own business and also residents from abroad. The bank in cooperation with prominent real estate developers such as Nakheel, Emaar will provide loans for 15 years or even more, depends on case to case.

This phenomenal growth in property investment has encouraged LIC Housing Finance, ICICI Home Loan from the Indian subcontinent which hopes to help Indians in Dubai to buy properties with their mortgage products and develop better business. A lot of people are attracted to these finance schemes as otherwise they cannot afford to buy property easily.

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