UAE scraps client age limit for repaying mortgages
The UAE Central Bank has removed the 70-year age limit for the last mortgage repayment in order to ease mortgage loan requirements for customers of banks and finance companies.
The apex bank said banks and finance companies will determine the age limit of their customers as per their risk management.
This decision has been made after taking feedback from the public.
"The amendments to the regulations will lift the current 70 year old maximum age requirement at the time of the last mortgage repayment. As part of the modification, the age requirement will now be determined by lenders as per their risk management and lending policies, offering customers greater choice and flexibility," the Central Bank said.
"We have carefully considered the feedback that we have received from bank customers across the UAE, and have acted swiftly to address and resolve their concerns. These amendments are designed to ease requirements of mortgage loans and will be applied with immediate effect," said Mubarak Rashed Al Mansoori, the Governor of Central Bank of UAE.
Real estate is one of the most vital sectors in the UAE economy, especially Dubai. It accounts for 13.6 per cent of Dubai's economy.
Property prices in the UAE have been consistently declining over the last five years due to oversupply and softer demand. Since it is a key sector in the UAE's economy, overall recovery of the economy largely hinges on the growth of the real estate. Efforts are being made at both the emirate and federal level to prop up this vital sector.
The bank had also amended regulations, reducing the early, or partial settlements fee of home loans from three per cent of the outstanding balance to one per cent of the outstanding balance, or Dh10,000, whichever is less. The reduction in the rate will be a welcome benefit for customers, offering them increased affordability and accessibility.
"We will remain committed towards protecting consumers, as well as enhancing monetary stability in the UAE through policy-making and compliance monitoring," he said.