K|Wise · Glossary
Deposit
The portion of the purchase price you pay from your own funds. The UAE Central Bank requires at minimum 20% for first-time resident buyers, 25% for second properties, and 25% to 50% for non-residents.
In plain English
The portion of the purchase price you pay from your own funds. The UAE Central Bank requires at minimum 20% for first-time resident buyers, 25% for second properties, and 25% to 50% for non-residents.
What Deposit means in practice
The deposit is the share of the purchase price the bank will not lend against. It is the mirror image of the loan-to-value ratio: a 20% deposit is simply another way of describing 80% financing.
It is also only part of the cash you need on completion. Registration fees, agency commission, valuation and mortgage registration all sit on top, and none of them can be added to the loan.
How it works in the UAE
The regulatory minimum depends on who you are and what you are buying: 15% for a UAE national's first home up to AED 5 million, 20% for an expatriate's first home at that level, rising to 35% and 40% respectively on a second or investment property, and 50% on off-plan. These are maximums a bank may lend, not entitlements — a lender can and often does ask for more.
A worked example
An expatriate buying their first home at AED 2,000,000 needs AED 400,000 as the 20% deposit, plus roughly AED 80,000 in Land Department fees and a further AED 45,000 or so in agency, trustee, valuation and mortgage registration costs.
Terms that come up alongside Deposit
Amortisation
The gradual repayment of a mortgage loan through scheduled monthly instalments of principal and interest. In the early years more of each payment goes to interest; in the later years more goes to principal.
Read the definitionBuy-to-Let Mortgage
A mortgage used to purchase a property that will be rented out rather than occupied by the borrower. Lenders assess the deal on projected rental income alongside the borrower's personal income.
Read the definitionCap
A contractual maximum on how much your variable mortgage rate can rise over a defined period. A common UAE structure caps the rate at 5.99% for the first 3 years.
Read the definitionConveyancing
The legal process of transferring property ownership from seller to buyer, including title checks, NOC issuance, mortgage registration, and the final Land Department transfer.
Read the definitionDBR (Debt Burden Ratio)
The total of your monthly debt commitments — mortgage, car loan, credit card minimums, personal loans — expressed as a percentage of your net monthly income. UAE Central Bank caps the DBR at 50%.
Read the definitionDrawdown
The point at which the lender releases the mortgage funds — typically paid directly to the seller at the Land Department on transfer day.
Read the definition