UAE Base Rate Rises to 3.9%: What It Means for Dubai Mortgage Buyers

The Central Bank of the UAE raised its Base Rate by 25 basis points to 3.9% in September 2026, then held it there in October. For anyone planning to buy property in Dubai with a loan, that matters for Dubai mortgage rates, though your own rate depends on your bank and your loan.

What the central bank did

• 16 September 2026: The CBUAE raised the Base Rate on the Overnight Deposit Facility from 3.65% to 3.9%, effective 17 September, after the US Federal Reserve raised its Interest Rate on Reserve Balances by 25 basis points the same day.
• 28 October 2026: The CBUAE kept the Base Rate at 3.9% after the Fed left its rate unchanged.
• Why it follows the Fed: The Base Rate is anchored to the Fed’s Interest Rate on Reserve Balances.
• Before the rise: The previous change was a 25 basis point cut in December 2025, from 3.90% to 3.65%.

How it affects mortgage buyers

Your mortgage rate is set by your bank, not by the Base Rate alone. Variable loans are typically priced on EIBOR plus a bank margin, so they tend to follow market rates, while a fixed period holds your rate steady until it ends. In early September, before the increase, fixed rates for shorter terms were around 3.5% to 4.2%, so expect offers to be repriced. Ask your bank for a current written quote.

A simple example

As an illustration only, on a AED 1.6 million loan over 25 years, a rise from 4.00% to 4.25% adds roughly AED 222 to the monthly payment. Your own figure depends on your lender, product and term.

Borrowing rules to know

• Expat first home: Up to 80% financing for properties valued at AED 5 million or less, and 70% above that.
• Second home or investment property: Up to 60%.
• Off-plan: Up to 50%.
• Mortgage registration: 0.25% of the loan amount.
• Market context: Mortgages made up 52% of transactions in H1 2026, down from 63% in H1 2022, according to Cushman & Wakefield Core and Reidin data.

Before you borrow

• Ask for fixed and variable quotes in writing
• Compare the total cost, not only the headline rate
• Budget for the down payment, the 4% DLD transfer fee and other purchase costs
• Test your budget against a slightly higher rate

Talk to Sky Valley Real Estate

Sky Valley Real Estate can help you shortlist homes that fit your budget and payment plan before you approach a lender. Speak to our team for a clear, no-pressure view.

FAQs

What is the UAE base rate now?

3.9%. The CBUAE raised it from 3.65% in September 2026 and held it on 28 October 2026.

Will my Dubai mortgage payment go up?

It depends on your loan. Variable-rate loans are more exposed than loans in a fixed period. Check your terms with your bank.

How much can I borrow to buy property in Dubai?

It depends on the property and the buyer. For an expat’s first home, the limit is 80% up to AED 5 million, and off-plan purchases are capped at 50%.

Sources: CBUAE, base rate raised to 3.9% · CBUAE, base rate maintained at 3.9% · Khaleej Times, Dubai mortgage market and US policy · Khaleej Times, mortgage loan-to-value rules