Banks in the UAE offer a wide range of mortgage options, which have become a lot more flexible over the last few years. While prospective home buyers spend a great deal of their time sifting through interest rates and associated costs, they may be overlooking important benefits offered by mortgages providers that could, in the long run, save time and money.
The fact is that some of these features can make a huge difference in helping the borrower reduce their debt burden and amount paid in interest over time. Some mortgages give you the option to make bi-monthly payments instead of monthly ones, while others are flexible in the amount of overpayments you can make during the year.
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What are some of the mortgage options that can add value to you?
As an example, Abu Dhabi Finance allows variable rate mortgage holders to pay up to 20% of the loan value in early repayment per year, without facing any penalties. This could be a particularly beneficial feature if you are looking to speedily pay off your loan without negative repercussions. Remember though that early repayment charges apply if you are on a fixed rate mortgage. Partial settlements of AED5,000 as a minimum can also be made up to twice a year on the monthly repayment date. During the second year of the loan, you can obtain a one-month payment holiday, which you can choose when to use. Another feature of Abu Dhabi Finance’s mortgage products is a calculator allowing you to view your monthly repayment schedule throughout the entire tenor of the loan.
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Similarly, Commercial Bank International (CBI) provides customers with free property and home contents insurance, a free for life credit card, as well as life insurance cover when they take out a mortgage with the bank. Those who transfer their existing mortgage to CBI, can do so without any processing fees, the bank claims. This is also the case at HSBC and many other banks in the UAE. Generally, these added benefits become clearer when customers shop around to transfer their mortgage.
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What to look out for
It’s important to factor in all of the benefits and drawbacks associated with all of the mortgage options available to you. Very often, banks and lenders may lure customers in with a relatively low introductory interest rate that will last for one year or a few years, only for it to change to a variable rate later on. Effectively, your overall cost of funding could add up when choosing these products. The next time you look for a mortgage, be sure to read through all of the various requirements associated with various mortgage offers, as they can vary greatly from one bank to the next.