UAE's new expat mortgage law: the facts so far

A central bank circular issued on December 30 capped mortgages for expatriates to 50 percent of the value of the property for the first home and to 40 percent for the second. The amount UAE nationals can borrow was also restricted to 70 percent and 60 percent.

Wednesday, 9 Jan 2013 9:53 AM

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Posted by: Mrs Giles Monday, 14 January 2013 6:12 PM[UAE] - UAE

This affects existing homeowners with home loans where the current rate is high (existing Lloyds TSB rate 7.49%) having now been taken over by HSBC Bank who despite advertising market rates of between 3.99% & 4.49% are not applying this rate to the unfortunate LTSB customers.

These customers are stuck with a very high rate and maybe unable to move their finance as many property values decreased . (despite the 19% increase which I am sure will only be in certain areas !!)
So these unfortunate customers who were assuming that HSBC would treat them fairly and apply their rate are going to be disappointed.

Maybe HSBCs line of thought is that these existing customers have NO choice , so therefore we do not need to adjust rates How very Noble and fair, and only in the UAE would this be allowed to happen . HSBC are a global bank !!

This 50% cap will reduce competition amongst banks and may well mean that rates increase as fewer customers will be able to transfer their mortgages.

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