Banks now offering up to 90% LTV on property in the UAE

06/06/2012 - Dubai Investment News Posted by Bob Brunskill
Banks now offering up to 90% LTV on property in the UAE
Investors who know the financial rigmarole of buying in Dubai may find a recent change helps them in their efforts to add more property in the UAE to their portfolio.According to Emirates 24/7, banks in the country are now offering loan-to-value (LTV) ratios of up to 90 per cent for ready units, where last year they may not have been willing to offer more than 70-75 per cent.Union National Bank is currently the only organisation offering up to 90 per cent finance with interest rates of 4.5 per cent for the first two years, with this limit set exclusively for properties in Dubai and Abu Dhabi.For other emirates, it is 85 per cent, according to the financial organisation.Furthermore, interest will not be charged for the final three years of the 25-year loan term for expats.An 80 per cent of-property-value limit has been set by HSBC, which offers interest rates of as little as 3.9 per cent annually for finance of up to 60 per cent or under and 4.4 per cent a year for finance over 60 per cent.This is on the condition of a minimum salary of AED 15,000 (£2,640) per month.Head of research for the Middle East and North Africa arm of Jones Lang LaSalle Craig Plumb told the newspaper that lower interest rates are likely to stimulate demand for property in the UAE."As the banks have witnessed improved liquidity, they are seeking to increase their exposure to the residential mortgage market to capitalise on the increased demand from home owners in selected locations," he explained.The expert noted that higher LTV ratios are a clear indication of the growing interest in real estate lending in the emirate.Further to Mr Plumb's opinion, a real estate agent added that this recent clutch of new products is likely to expand as other banks "join the bandwagon", offering investors a greater choice of financial products to boost their portfolios.