Sunday, March 07, 2010

Slashing of mortgage rates to boost UAE real estate market

Following high mortgage rates, the Banks and Finance companies in the UAE are finally reducing lending rates for homes, say analysts.

The Banks are relaxing their lending criteria, a measure expected to broaden the buyers base and boost the sagging fortunes of the real estate sector in the country.

Several banks have reduced their charges and have increased their loan-to-value ratio, since the start of the year, said Dean Biddulph, Senior Mortgage Advisor, Independent Finance, a Dubai-based company offering financial services.

Although this comes as good news to property developers, who are to release thousands of completed property units in the UAE market this year, the changing economic scenario has kept the lenders and borrowers focused on low-risk investments, with completed properties being their first choice of investment, says Faisal Iqbal, Head of Secured Lending Business, Barclays.

Among the lenders that have slashed mortgage rates for new and existing clients are Amlak, one of the largest Islamic mortgage providers. The profit rate of Amlak has dropped to 6.9percent for few of its existing clients.

Both Amlak and Tamweel are currently ready to lose part of their profit margin to gain the advantage of reducing their non-performing loan figures as much as possible. The companies believe that by slashing mortgage rates, the mortgage holders can keep away from missing out on their monthly mortgage payment.

Few other banks offering lesser mortgage rates are HSBC Home Finance, Standard Chartered UAE, and Mashreq.

1 comment:

Gerhard said...

"The Banks are relaxing their lending criteria, a measure expected to broaden the buyers base and boost the sagging fortunes of the real estate sector in the country." This has proven to be helpful. By expanding the buyer base and lowering the standards in choosing loaners, banks' offers can multiply exponentially, raising the ratio by a large degree. However, before purchase, it's advisable to consult an investment property, in perth for example, to balance out your finances.