By Joanna Hartley
40% fear the doubling of salary limits for expat mortgages will impact further on downturn.
Moves by UAE banks to increase salary limits for expatriates looking for a mortgage have been branded ‘dangerous’ by more than 40 percent of respondents to an online poll.
A total of 41.6 percent thought the move would only contribute further to the economic downturn currently being experienced in the UAE, the Arabian Business survey found.
However, 31.3 percent thought the exact opposite, calling the move prudent, as it would ensure loans were only issued to those who could repay their debts.
A further 15.8 per cent thought it was an over the top reaction that would turn expatriates against UAE banking institutions and 11.3 per cent thought it was a good idea for now, but salary limits should go back to normal levels as soon as possible.
Arabian Business revealed 10 days ago that Emirates NBD, the largest bank in the Middle East, revealed it had hiked the minimum salary limit for expatriates seeking a mortgage by more than 200 percent and doubled the threshold for locals.
The bank is now only considering expatriate customers for a home loan if they earn a minimum of 25,000 dirhams ($6,800) a month, up from a previous limit of 8,000 dirhams in November last year.
A spokesman for the bank refused to comment, but added: “These [lending policies] are regularly changed according to market conditions.”
I believe the UAE banks just shot themselves in the leg. The chance of some one losing their job and not being able to pay their mortgage has nothing to do with the level of their income. If anything, the lower income personnel have more job security than the top paid people.
Does the customer has a right to sue the bank for non compliance to the agreement. Or the banks have an escape route to avoid legal tangles like james bond.