If you have a mortgage in the UAE, you might be wondering: Is now the right time to refinance? With three interest rate cuts in the past four months, many homeowners—especially those with variable-rate mortgages—are looking at their options to lock in lower EMIs.
But is refinancing the best move for you? Let’s break it down!
Why Are Homeowners Considering Refinancing?
Interest rates have dropped by 1% in both the US and UAE since September 2024, making mortgage rates more attractive.
Fixed mortgage rates are now around 3.79%, a big drop from last year’s highs.
Variable-rate mortgage holders have seen their EMIs rise since March 2022—but now, they have a chance to secure a lower rate.
However, refinancing isn’t always the best move—it depends on your current rate, potential savings, and refinancing costs.
Fixed vs. Variable Rates: What’s the Smart Choice?
Most mortgages start with a fixed-rate period (usually 2–3 years) before switching to a variable rate, which moves based on market conditions.
Variable rates = Potential for even lower rates in the future
If your current rate is above 4.75%, refinancing could lower your monthly payments. But if your rate is already below 4.75%, you might be better off waiting to see if rates drop further.
But here’s the reality: Even though base rates have dropped, long-term interest rates in the US remain high, which has slowed down the decline of variable mortgage rates in the UAE.
It can take 6–12 months for rate cuts to fully impact mortgage pricing, so the benefits of refinancing might not be immediate.
Lower rates in the future will not only help current homeowners but also make mortgages more accessible for new buyers.
Should You Refinance Now or Wait?
Refinancing makes sense if:
You have a variable-rate mortgage above 4.75%
You’re on a fixed rate above 5% and can secure a lower deal
Waiting might be better if:
Your current mortgage rate is already below 4.75%
You don’t want to pay refinancing costs unless the savings are significant
Pro Tip: Always calculate the total refinancing cost vs. your potential savings before making a decision!
Final Thoughts: What’s Your Move?
With UAE mortgage rates shifting, homeowners have an opportunity to save—but it’s not a one-size-fits-all decision. If you’re thinking about refinancing, now is the time to crunch the numbers and see if it’s the right move for you.