Banks lowering mortgage rates

ADCB said there has been a trend towards a shift from Eibor to banks' own base rates since it does not necessarily depict the borrowing costs. (EB FILE)

Some of the commercial banks in the UAE are lowering mortgage interest rates and early settlement charges in order to bring relief to mortgage takers.

ADCB said there has been a trend towards a shift from Eibor to banks' own base rates since it does not necessarily depict the borrowing costs.

Abu Dhabi Commercial Bank (ADCB), Mashreq, RAK Bank, Standard Chartered and Dubai Islamic Bank (DIB) have lowered their mortgage interest rates in the past two months, according to Chris Dommett, CEO, John Charcol Middle East, a mortgage analyst. ADCB has lowered its mortgage interest rates two months ago by almost one per cent to range between 7.25 per cent and 8.75 per cent per annum for all its new contracts.

"It is a good move that banks are lowering interest rates as it will help boost the real estate market. This also shows the banks are looking confident of their risk profile." said Chris. Barclays said it has reduced its early settlement charges effective January this year on mortgages from a maximum of three per cent to a flat fee of one per cent.

"In addition, we have also increased the partial payment allowance from 10 per cent to 30 per cent of the loan amount, allowing customers to reduce their monthly mortgage payments without any levies," said Faisal Iqbal, Head of Secured Lending Business, Barclays UAE.

 

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