Mortgage Refinancing in Dubai: When Banks Require New Property Valuations

Mortgage refinancing in Dubai requires a fresh, independent property valuation before any lender—whether your existing bank or a new one—will issue final approval. The Central Bank of the UAE Mortgage Regulations mandate that an independent on-site appraisal be completed prior to any irrevocable commitment to lend, with property appraisal reports required to reflect current market conditions rather than anticipated future price appreciation. This rule applies universally: bank buyouts, equity release, tenure extensions, and rate renegotiations all trigger the requirement in most cases. Valuation costs typically fall between AED 2,500 and AED 3,500 plus 5% VAT, payable by the borrower, and the report must come from a RERA-approved or RICS-registered firm accepted by the lending bank.

The outcome of that appraisal directly determines how much you can borrow. Dubai property Dubai property valuation by a DLD-approved valuer is the benchmark figure banks use to calculate your loan-to-value (LTV) ratio—not the original purchase price, not your own estimate, and not a broker's informal market comparison. If the certified valuation comes in below what you owe or below the amount you hoped to refinance, the bank adjusts the loan downward accordingly. Given that Dubai residential values have appreciated by more than 50% in several communities over the past three to four years, a current valuation often unlocks significantly more equity than borrowers expect—though valuation haircuts on unique or unusual properties can work in reverse.

Beyond standard refinancing, a current official valuation also plays a critical role in any planned gift transfer of property in Dubai, where DLD regulations require a certified market value assessment before the 0.125% transfer fee can be calculated and the registration processed. This connection between mortgage-related valuations and transfer procedures matters to investors restructuring ownership for succession or estate planning while an existing mortgage is still in place. In those cases, the bank's clearance or an approved liability transfer to the recipient is required before DLD will process the gift registration—meaning the valuation often serves double duty for both the refinancing and the subsequent ownership transfer.

What Mortgage Refinancing Means in Dubai's Context

Refinancing in Dubai covers three distinct products that banks and borrowers often conflate. A mortgage buyout transfers your outstanding loan to a different bank, which settles the existing balance and issues a new facility at revised terms—typically a lower rate or longer tenure. Equity release (also called a top-up) allows you to borrow against the increased market value of a property you already own with or without a current mortgage, extracting cash for reinvestment or personal needs. Rate renegotiation with your existing lender is a less common but possible outcome when your fixed-rate period ends and you negotiate the new variable or re-fixed terms without switching institutions. Each of these engagements triggers the valuation requirement, though the practical sequence and exact timing differ by product and lender.

In practice, mortgage buyouts dominate the Dubai refinancing market, and activity has surged since the UAE Central Bank reduced early settlement fees from 3% to a maximum of 1% of the outstanding loan balance or AED 10,000 (whichever is lower) under Central Bank Board Resolution No. 96/2019. This reduction substantially changed the cost-benefit calculation for switching lenders, particularly for borrowers who locked in higher rates during the 2022–2023 EIBOR spike. As fixed rates starting from 3.79% entered the market in late 2024, the math on a buyout became compelling for many borrowers still repaying at 5%–6%, provided the aggregate transaction costs—including the new valuation, DLD mortgage registration fee of 0.25% of the loan amount plus AED 290, and bank arrangement fee of up to 1% of the loan—are factored into the break-even timeline.

When Banks Specifically Trigger the New Valuation Requirement

Bank Buyout (Lender Switch)

When switching from one bank to another, the incoming lender will always commission its own independent valuation before issuing a final offer letter. The new bank cannot rely on the outgoing lender's appraisal—each institution maintains a board-approved panel of valuers, and the Central Bank regulations specifically require the appraisal to be performed by a party independent of the loan decision process. According to EGSH's mortgage registration guide, valuation reports issued for this purpose are typically valid for approximately 30 days, which means the valuation must be completed as close to formal approval as possible to remain within the lender's acceptance window. If the process drags beyond that window—common when seller NOC issuance or DLD appointment scheduling causes delays—the bank may request a fresh report.

In practice, the incoming bank orders the valuation directly through its approved panel after you submit your formal application. You rarely select the valuer yourself in a buyout context, though you pay the fee. Some banks advertise valuation fee waivers as a promotional condition on buyout products, so confirm whether your offer includes this concession before accepting. Processing fees for buyout mortgages are sometimes waived separately, but this varies by bank and campaign.

Equity Release (Top-Up Against Existing Property)

Equity release requires a valuation even when you remain with your existing bank. The reason is straightforward: the bank needs to confirm that the current market value supports the increased loan exposure before it agrees to lend additional funds. First Abu Dhabi Bank (FAB), for example, explicitly states on its remortgage product pages that it requires a "recent dated property valuation report" at the customer's cost for any top-up application. The amount you can borrow is capped by the LTV limits set in the CBUAE Mortgage Regulations: for expatriate resident first-property owners, the ceiling is 80% of the appraised value for properties under AED 5 million. After deducting your outstanding balance, the remainder represents your accessible equity.

Dubai's rapid price appreciation over recent years has made equity release particularly attractive. A property purchased in 2020 at AED 1.5 million may now appraise at AED 2.2–2.4 million, transforming what was a fully utilized 80% LTV facility into one with AED 300,000–500,000 of accessible equity. Banks recalculate this against current income and debt burden ratio (DBR) limits—which the CBUAE caps at 50% of gross monthly income including all loan obligations—before approving any additional lending.

Rate Renegotiation and Tenure Changes Within the Same Bank

This scenario is more nuanced. When a fixed-rate period expires and a borrower asks to lock in a new fixed rate rather than default to a variable rate, many banks will process this as an internal adjustment without requiring a new valuation. However, if the request involves increasing the loan principal—even modestly to roll in new fees—or formally restructuring the product type, a fresh appraisal is typically required. The test most bank credit teams apply is whether the change constitutes a material modification to the collateral position. A straightforward rate re-fix that keeps everything else constant rarely triggers a valuation; a tenure extension combined with a partial equity draw typically always does.

Ownership Changes That Affect an Existing Mortgage

If a borrower intends to add a co-applicant, transfer ownership to a spouse, or otherwise restructure the legal title while a mortgage is in place, the bank must reassess its security position. In these cases—which often arise in the context of divorce, estate planning, or visa-related restructuring—a fresh valuation is almost universally required. Properties with an existing mortgage cannot be transferred as a gift to a first-degree relative without the bank's written clearance or approval to transfer the loan obligation to the recipient, per DLD's property gift registration requirements. The bank will condition that clearance on a current valuation confirming the collateral remains adequate.

Costs and Fees Involved in Dubai Mortgage Refinancing

The total cost of refinancing in Dubai goes well beyond the valuation fee. Accurately calculating the break-even point against potential interest savings is essential before proceeding.

Fee amounts verified from DLD fee schedules, CBUAE Mortgage Regulations, and institutional sources. Confirm current rates with your bank and the DLD before proceeding.

For a typical AED 1.5 million outstanding loan refinanced by an expatriate borrower, the aggregate transaction cost—early settlement, new registration, arrangement fee, and valuation—typically falls between AED 30,000 and AED 50,000 before VAT adjustments. At a 1% rate saving on a 15-year remaining term, annual interest savings approximate AED 15,000–18,000 on this principal, creating a 2–3 year break-even period. This calculation shifts substantially if the early settlement fee applies at the higher end or if the arrangement fee is not waived.

Required Documents for Dubai Mortgage Refinancing

The document set for a Dubai mortgage refinancing application is similar to an original mortgage application. Prepare the following before approaching any lender:

Identity and residence:

• Valid passport (copies of all pages for non-residents)
• Emirates ID (for UAE residents)
• UAE residence visa page

Income verification:

• Salary certificate or employment letter (salaried employees)
• Bank statements for 6–12 months showing salary credits
• Audited financial statements and trading license (self-employed, minimum 2 years)
• Rental income evidence if applicable

Property documents:

• Original title deed
• Existing mortgage liability letter from the outgoing bank (confirms outstanding balance and any prepayment conditions)
• Building floor plan or affection plan
• Service charge clearance certificate
• NOC from developer (required for freehold properties with ongoing developer obligations or strata-managed buildings)

Additional for equity release:

• Bank's top-up request form with stated purpose
• Proof of intended use may be requested for larger release amounts
• Common Complications and How to Handle Them

Expired valuation before DLD registration: If the period between the bank's appraisal and the DLD registration appointment exceeds the validity window—as little as 30 days in some cases—the bank may require a fresh report at your cost. Coordinate DLD trustee appointment scheduling closely with your bank's timeline to avoid this.

Outgoing bank delays issuing the liability letter: The letter confirming your outstanding balance is required by the incoming lender before it will issue a final offer. Banks are obligated under CBUAE regulations to provide this without undue delay, but in practice, the process can take 5–10 business days. Submit your request formally and in writing to create a documented record.

Service charge arrears blocking the NOC: If your property is in a building with RERA-regulated service charges and there are outstanding arrears, the developer or building manager will not issue an NOC, which blocks the DLD registration of the new mortgage. Clear all service charge balances before initiating the refinancing process.

Valuation lower than the purchase price: This is most common for units purchased at the peak of a price cycle in 2014–2015 in communities that have not recovered, or in certain apartment segments. In this scenario, the bank may not offer enough to cover the outstanding balance, creating a shortfall that must be topped up with personal funds before the buyout can complete. Always obtain an informal market assessment before triggering a formal valuation in a depreciated community.

Income change reducing DBR headroom: If your income has decreased since the original mortgage—a common scenario for self-employed borrowers or those who changed employment sectors—the 50% DBR ceiling may now constrain the refinancing amount below the outstanding balance. Address any DBR concerns through a mortgage broker before applying.

FAQ

Can I use the same valuation report for multiple banks when comparing refinancing offers?

Generally no. Each bank requires a valuation from its own approved panel, and reports commissioned by one institution are not transferable to another lender's process. Some banks will accept a recent independent valuation from a firm on their panel if it was completed within their validity window (often 30 days), but this is not guaranteed. If you are comparing offers across multiple banks simultaneously, expect to pay separate valuation fees for each formal application unless you secure preliminary non-binding offers before triggering valuations.

How long does Dubai mortgage refinancing take from start to finish?

A straightforward buyout with a salaried borrower, complete documentation, and a clear title typically completes in 3–5 weeks. This covers pre-approval (3–5 business days), valuation (3–5 business days), final offer letter, NOC from developer, outgoing bank clearance, and DLD registration. Complex cases—self-employed borrowers, properties with service charge issues, or non-residents—take 6–10 weeks. Confirm the validity windows on your valuation and bank approvals to avoid restarting any steps.

What happens if the new valuation is significantly lower than my outstanding loan?

If the valuation produces an LTV ratio that exceeds the CBUAE ceiling for your borrower category, the incoming bank cannot process the buyout at the requested amount. You would need to bridge the shortfall from your own funds, renegotiate terms with your existing bank (who may offer a re-fix without requiring a buyout), or wait for market values in your community to recover. Some borrowers in this position negotiate a partial prepayment of the existing loan to bring the outstanding balance within the new LTV ceiling before reapplying.

Do valuation fees get refunded if the refinancing does not proceed?

No. Valuation fees are paid to the third-party valuation firm and are non-refundable regardless of whether the bank proceeds with final approval or you withdraw from the application. This is stated in standard mortgage terms. Early settlement fees paid to the outgoing bank before the new lender registers its charge are also non-recoverable if the transaction fails at a late stage. Confirm all conditions are met before authorizing the outgoing bank to discharge the existing mortgage.

Is a new valuation required if I refinance with my existing bank?

For a pure rate re-fix within the same bank where no new money is released and the loan amount stays the same, many banks process the change internally without a new valuation. However, if the application involves increasing the loan principal—including rolling any fees into the balance—or if the bank's internal policy treats the product change as a new credit facility, a fresh independent valuation is required. Ask your bank relationship manager directly whether the proposed change triggers valuation under their internal credit policy.

How is the valuation fee calculated for refinancing in Dubai?

Banks typically charge a flat fee set by the valuation firm rather than a percentage of property value. Standard fees are AED 2,500–3,500 plus 5% VAT for most residential properties. Commercial properties and large villas may attract higher fees. Some banks waive this fee as a promotion on buyout products, particularly in competitive interest rate environments. Always confirm the exact fee and whether it is waived before the bank orders the valuation.

Can a non-resident refinance a Dubai property?

Yes, but with tighter restrictions. Non-residents can refinance through a smaller number of banks—including HSBC (Premier/Private Banking clients), Mashreq, and FAB—at LTV ratios that typically cap at 50–60%, compared to 80% for expatriate UAE residents. Stricter income documentation applies, and not all banks will accept non-resident refinancing applications for all property types. Confirm current programme availability directly with lenders, as eligibility criteria change with market conditions.

What is the DLD mortgage discharge fee when refinancing?

When the outgoing bank's mortgage charge is removed from the title and a new charge is registered for the incoming bank, the DLD charges a discharge fee—typically around AED 1,560 for standard residential properties—plus the new mortgage registration fee of 0.25% of the new loan amount plus AED 290, and a service partner fee at the trustee office of AED 4,000 plus VAT for properties valued above AED 500,000. Both the discharge and the new registration are processed during the same DLD session. Confirm current fee schedules at dubailand.gov.ae or with a DLD-authorized Real Estate Registration Trustee Centre such as EGSH before budgeting.