Mortgages for Commercial Property


In the UAE, Commercial mortgages are available in the true sense of the word, where commercial entities are buying property or where individuals or commercial entities are buying commercial property (such as shops, factories, warehouses etc). In some other countries in Europe, commercial finance allows individuals to buy a residential property under the guise off a limited company as a means to reduce tax exposure.

Commercial mortgages are available through a number of financial institutions in the UAE. Some banks even have the word commercial contained within their name however they do not offer any form of commercial lending!

These types of mortgages have not been in existence long and tend to be slightly more expensive than standard residential lending (which seems to be the norm globally). A commercial mortgage through a retail bank can also be used to purchase land. It cannot however be used for construction finance or to buy a completed tower. Only specialist lenders in the UAE have the ability to lend to clients looking to buy a full tower or want to construct a tower in the Emirates.

UAE Refinance Mortgage

Why utilise a broker?


A mortgage is often the biggest financial commitment of a person's life. Normally we seek advice from doctors, lawyers and accountants without questioning the need for their services, why should you take a risk trying to source a mortgage by yourself without the help of a mortgage adviser. Here at Casa Capital we have access to all the leading banks in the UAE, meaning access to hundreds of mortgage products and solutions. Although most clients are very rate driven, there are many other factors that need to be taken into consideration when sourcing a mortgage.

Finding the right commercial mortgage?


There are three steps to finding the right mortgage for any client:

Understand

The first step in the process is to undertake a call or meeting with you where we will conduct a full fact find to understand your requirements further.

Analyse

The second step is for us to analyse the information we have gathered in order to start filtering out the banks that are not applicable.

Recommend

Based on the information we have collected, the research we have undertaken and the analysis of the products available we will then make a recommendation.

Types of commercial mortgage available


There are an abundance of products and choices available in the UAE market. Some banks will offer discounted fees if you decide to bank with them instead of your existing bank of choice. This is known as salary transfer.

Some banks and institutions will offer the ability to make overpayments free of charge and some even allow you to exit or pay off the mortgage without cost, however no single bank does it all!

In an ideal world it would be great to have a bank offer the lowest rate, the lowest costs and charges, however where a lender appears great in one aspect it could be less appealing in another. That is why it is very important to understand all of your requirements fully before making a recommendation. There is no point in recommending a low rate that comes with mandatory salary transfer if you are unable to transfer salary due to other loan commitments as an example!

The main types of mortgage when you consider rate are as follows:

FIXED

A fixed rate mortgage is where the bank fixes the interest rate for between 1 and 5 years which protects the rate against fluctuation in the Emirates Interbank Offer Rate (EIBOR).

TRACKER

This type of rate consists of a fixed margin stipulated by the bank plus the prevailing EIBOR rate which changes daily (although most banks use a 3 month rolling average rate). If you believe rates will decline then tracker type products are normally a good option.

VARIABLE

Some banks will offer a variable rate, an internal rate which is set by various internal departments within the institution. Although variable rates are no overly transparent, they can sometimes be cheaper than fixed rates.

Why not call us for a no obligation consultation to find out more