If you own a property in Dubai with an outstanding mortgage below its current market value, you may be able to access that equity without selling. This is known as equity release (or loan against property in some bank product names), and it is one of the most common refinancing strategies used by existing property owners in the UAE.
How equity release works in Dubai
Equity is the difference between your property's current market value and your outstanding mortgage balance. For example, if your property is worth AED 2.5 million and your outstanding mortgage is AED 1 million, you have AED 1.5 million in equity.
Banks in the UAE will lend up to a maximum LTV of the current property value — typically 70–80% for UAE residents depending on the lender and property type. If the bank lends at 75% LTV on a AED 2.5M property, the maximum total mortgage would be AED 1.875M. If your existing mortgage is AED 1M, you could potentially release up to AED 875,000 in cash — subject to your income supporting the higher debt repayment.
Common uses for released equity
- Deposit for a second property: Released equity can fund the deposit on an additional investment property, enabling portfolio expansion without liquidating savings or other assets.
- Home improvements: Renovations and refurbishments that increase the property value or rental appeal are approved uses in most UAE equity release products.
- Business investment or working capital: Some applicants use equity release to fund business needs, though lenders will scrutinise this purpose and may require additional documentation.
- Debt consolidation: Replacing higher-rate personal loans or credit card balances with a lower-rate secured loan can reduce overall monthly costs — though extending debt over a longer mortgage tenure increases total interest paid.
The equity release process
- Property valuation: The bank commissions an independent valuation of your property to establish current market value.
- Income assessment: Your income is reassessed to confirm you can service the higher loan amount. The increased repayment must fit within the 50% DBR limit.
- Mortgage restructure or top-up: The bank either increases your existing mortgage (if staying with the same lender) or you refinance the full balance at a new lender who funds the top-up simultaneously.
- Funds release: Once approved, the additional funds are disbursed according to the bank's approved purpose terms.
Using a mortgage advisor helps you compare which lenders offer the most competitive equity release terms and whether refinancing to a new lender at the same time as releasing equity produces better overall economics than staying with your current bank.