Mortgage refinancing has become an increasingly popular financial strategy among property owners in the UAE. Whether you’re looking to reduce your monthly payments, take benefit of lower interest rates, or access your home equity for personal or business use, refinancing can be a smart move. But not everyone qualifies automatically. If you’re considering mortgage refinancing in UAE, it’s crucial to initial determine if you meet the eligibility requirements.
In this blog, we’ll guide you through the key factors lenders assess to decide if you’re eligible for mortgage refinancing—and how you can prepare for a successful application.
Why Refinance Your Mortgage?
Before jumping into eligibility, consider the reasons homeowners choose refinancing:
- Lower interest rates = lower monthly payments
- Consolidation of debts into a single mortgage
- Switching between interest rate types (fixed or variable)
- Releasing equity for renovations, investments, or emergencies
- Shortening the loan term to become debt-free faster
Understanding your objective will also help you determine the kind of refinancing that suits your needs best.
Key Eligibility Factors for Mortgage Refinancing
1. Current Property Status
Lenders will only refinance properties that meet specific criteria:
- The property must be completed (not under construction)
- It must be located in a freehold area
- It should have legal title deeds and registration
If the property is already mortgaged, it must be eligible for buyout by another lender, and there should be no ongoing legal disputes attached to the asset.
2. Loan Repayment History
Lenders assess your repayment history to evaluate how you’ve managed your current mortgage. A consistent record of on-time payments indicates reliability and increases your chances of approval. Missed or delayed EMIs, on the other hand, may affect your creditworthiness.
3. Credit Score
Your credit score plays a vital part in determining eligibility. In the UAE, credit scores are issued by Al Etihad Credit Bureau (AECB). Most banks want a minimum credit score of 620–700 for refinancing approval, though a higher score can fetch better interest rates and terms.
Tip: Before applying, check your AECB report for errors or outstanding liabilities that could be resolved in advance.
4. Loan-to-Value (LTV) Ratio
The Loan-to-Value ratio compares the outstanding loan amount to the current market value of the property. For mortgage refinancing, lenders generally allow a maximum LTV ratio of 80% for UAE nationals and 75% for expatriates.
This means that if your property is worth AED 2 million, your refinanced mortgage should not exceed AED 1.6 million (for UAE nationals). A lower LTV ratio often translates into higher chances of approval.
5. Income and Employment Stability
Lenders wants assurance that you can afford the refinanced loan. For this, they evaluate:
- Monthly income
- Employment type (salaried or self-employed)
- Job tenure or business history
- Company classification or industry stability
Most banks require a minimum monthly income (e.g., AED 15,000–25,000), and salaried applicants are typically expected to be with their current employer for at least 6 months.
Self-employed individuals must show a consistent income record, valid trade license, and audited financials over 1–2 years.
6. Debt Burden Ratio (DBR)
The DBR is a critical metric used by UAE banks to assess a borrower’s ability to manage debt. It calculates the ratio of your monthly debt obligations (including credit cards, loans, and mortgage) to your monthly income. The Central Bank of the UAE mandates that your DBR should not exceed 50%.
If your DBR is already high, consider paying off smaller loans or credit cards before applying for refinancing.
7. Existing Loan Terms
Refinancing is more effective if you’re still early to mid-way through your current loan term. If you’re nearing the end of your mortgage, the savings from refinancing may be minimal. Additionally, some banks charge early settlement fees—so evaluate the financial benefits after factoring in these charges.
Documents You’ll Typically Need
- Emirates ID and passport copy
- Existing mortgage statement
- Salary certificate or trade license
- Last 6 months’ bank statements
- Property title deed
- Liability letter from current lender
- Credit report from AECB
In Conclusion
Knowing your eligibility for mortgage refinancing in UAE is the first step toward unlocking better financial flexibility and long-term savings. With the right documentation, a healthy credit score, and a clear repayment history, you can position yourself as a strong candidate for refinancing.For expert support in assessing your eligibility and finding the best refinancing options tailored to your goals, trust PWF Broker—your reliable partner in UAE mortgage solutions.