UAE mortgage affordability calculator

What does a 30,000 income with a 500,000 deposit buy?

A national buying a first home. Monthly income 30,000 AED, 3,000 AED of existing instalments, a 500,000 AED deposit, quoted 4.5% over 25 years.

1. Obligations ceiling: 30,000 x 50% = 15,000 AED; less the 3,000 already paid, 12,000 AED is left for an instalment
2. Largest loan at 4.5% over 25 years: about 2,158,924 AED, and the income multiple of 30,000 x 12 x 8 = 2,880,000 does not bite
3. From the income side the ceiling is 500,000 + 2,158,924 = 2,658,924 AED; from the deposit side at 85% it is 500,000 / 0.15 = 3,333,333, so the smaller is 2,658,924
4. At 6.5% the same instalment services 1,777,232 AED, putting the ceiling at 2,277,232 AED

The range is 2,277,232 to 2,658,924 AED, 381,692 apart. What binds here is the income rather than the deposit, so adding to the deposit alone will not move the ceiling much while the instalment is what decides.

What are the four ceilings, and why a range rather than a figure?

Work out the highest property price your income and deposit can carry under the central bank ceilings, and read it as a range: the top at today rate and the bottom if the rate rises two points.

Four ceilings work together in the UAE. The debt burden ratio, which is half of monthly income. The loan-to-value, which is 85% for a national and 80% for a resident on a first home up to AED 5 million, 75% and 70% above that, 65% and 60% on a second or investment property, and 50% for everyone off-plan. The income multiple: eight years of a national income and seven of a resident one. And your deposit.

The five-million threshold makes for a neat case: the ratio depends on the price and the price depends on the ratio. A buyer who passes five million at the higher ratio and falls short of it at the lower one has a ceiling of exactly the threshold, because the higher ratio still applies at five million itself. The calculator handles that explicitly and tells you, rather than picking one ratio and staying quiet.

The rate-rise test here is not this site being careful: Article 3 of the mortgage regulation requires the lender to stress the loan at two to four points above the current rate, and what is applied is the bottom of that band. The income multiple genuinely bites too when the term is long and the rate low: at 3% over 25 years half an income services about 105 years of borrowing, so the multiple decides rather than the instalment, while at 5.5% it does not bite at all. That is why the result names which constraint settled it.

• Instalment ceiling = half of monthly income, less what you already pay
• Largest loan = the smaller of: what the instalment services, or the income multiple (8 national, 7 resident)
• Highest price = the smaller of: deposit + loan, or deposit / (1 minus the LTV)
• The range = the same sum at today rate, then at that rate plus two points