Balance Transfer / Refinance (Buyout)
When your initial fixed-rate period ends or market conditions change, transferring your mortgage balance to another lender can reduce monthly outflows or secure a more suitable repayment structure.
Key Regulatory Parameters
Reviewed: 2026-10-21What It Is
A balance transfer (or buyout) involves a new lender paying off your outstanding mortgage balance with your existing bank and taking over the mortgage security registered at the land department.
Key Features & Structure
- Central Bank early settlement fee capped at 1% of outstanding balance or AED 10,000, whichever is lower.
- Opportunity to move from high post-fixed variable EIBOR margins to a competitive new fixed rate.
- Potential to restructure loan tenure up to the maximum allowable remaining limit.
- Option to combine with equity release if property value has appreciated.
Who It Suits
Homeowners whose initial 1-, 2-, 3- or 5-year fixed rate has reverted to a high variable margin, or who want to reduce monthly payments.
Important Things to Consider & Risks
- Switching incurs transaction costs: new valuation (~AED 3,000), DLD mortgage re-registration (0.25%), discharge fees, and trustee fees.
- Requires a formal Liability Letter from your existing bank, which typically has a 30-day validity window.
Typical Documents Required
- Original loan offer and repayment history
- Formal Liability Letter from existing lender
- Updated KYC, salary certificates, and 6 months bank statements
- Copy of property Title Deed
Estimate Your Monthly Payments
Use our client-side calculator to model repayment scenarios under CBUAE rules.
Frequently Asked Questions
Typically 4 to 8 weeks, primarily governed by the time required for the existing lender to issue the liability letter and release the title deed.
Central Bank regulations strictly cap early settlement penalties at 1% of the outstanding loan balance or AED 10,000, whichever is lower.