What equity release is
Equity release is a mortgage taken on a property you already own in order to get cash out of it. Equity is the bank's valuation of your property minus what you still owe. The bank registers a new mortgage on the title deed, and you keep the property, the tenant and the rental income.
There are three common forms in the UAE:
- Pure equity release (cash-out): the property is fully paid, and a bank lends against it.
- Buy-out plus equity: the property has a mortgage. A new bank pays off the old loan and lends more than the outstanding balance. You receive the difference, often at a lower rate.
- Top-up: your current bank increases the existing loan, if its policy allows.
Banks that market equity release or buy-out plus equity in the UAE include Mashreq, ADIB, Emirates NBD and ADCB, among others. Products, rates and eligibility differ by bank and change during the year, so compare several offers.
How much you can release
The amount you can take out is the new loan allowed by the Central Bank LTV cap, minus what you still owe. The caps are the same as for a purchase mortgage and are measured on a fresh bank valuation, not on the price you paid.
- Expat, the property is your own first home up to AED 5m: up to 80% of value.
- Expat, own first home above AED 5m: up to 70%.
- Expat, second home or rented-out investment property: up to 60%.
- Non-resident: no separate legal cap, but banks that offer it usually stop at about 50 to 55%.
Many banks set their own equity release limit below the legal cap, so 60 to 75% is common for residents even on a first home. The 50% debt burden ratio also applies: the new monthly payment plus your other debts must stay within 50% of gross income after a stress test.
| Example: rented-out apartment, resident expat | AED |
|---|---|
| Bank valuation | 3,000,000 |
| Maximum new loan at 60% | 1,800,000 |
| Outstanding mortgage paid off | 900,000 |
| Cash before costs | 900,000 |
| Costs (see below), about | 37,000 |
| Net cash, about | 863,000 |
The new loan of AED 1,800,000 over 25 years at 4.2% costs about AED 9,700 a month. The mortgage calculator shows the payment for your own figures.
Who qualifies
Residents with stable income qualify most easily. Non-residents can release equity too, but at lower LTV and with fewer banks. In all cases the property must be ready, with a title deed in your name.
- Salaried residents: usually 6 months or more with the current employer and income that passes the 50% DBR test.
- Self-employed: 2 to 3 years of trading and audited accounts.
- Non-residents: home-country income proof, credit report and bank statements, similar to a non-resident purchase mortgage.
- Age: the loan must end by about 65 for salaried and 70 for self-employed borrowers at most banks. Maximum term 25 years.
- Off-plan: equity cannot be released while the property is under construction, because there is no title deed yet to mortgage.
Banks differ on how the money may be used. Some allow it only for buying property in the UAE or for renovation and pay the seller or developer directly. Others leave the use open. Ask before you apply.
Costs of equity release
Expect total costs of roughly 1.5 to 2.5% of the new loan, depending on whether an old loan is being paid off. In the example above, on a new loan of AED 1.8 million and an old loan of AED 900,000, the total is about AED 37,000.
- Valuation: about AED 2,500 to 3,500, sometimes refunded in bank campaigns.
- Arrangement fee: 0 to 1% of the new loan plus VAT (up to AED 18,000 in the example).
- DLD mortgage registration: 0.25% of the new loan (AED 4,500 in the example) plus small admin fees.
- Early settlement of the old loan: capped by the Central Bank at 1% of the outstanding balance or AED 10,000, whichever is less (AED 9,000 in the example).
- Release of the old mortgage at DLD and bank letters: about AED 1,300 plus small letter fees.
- Life and property insurance on the new loan, paid monthly or yearly.
There is no 4% DLD transfer fee, because the property does not change owner.
Process and timeline
Most equity release and buy-out cases complete in 2 to 6 weeks. The main variables are documents, the valuation and, for buy-outs, how fast the old bank issues its liability letter.
- Eligibility check: income, existing debts, rough property value.
- Offers compared and an application submitted.
- Independent valuation ordered by the new bank.
- Final approval and loan documents signed.
- For a buy-out: the old bank's liability letter, payment of the old loan, and release of its mortgage at DLD.
- New mortgage registered at DLD and the released amount paid out.
Using released cash to buy a second property or off-plan
A common use of equity release is the down payment on a second property. It can work, but you are then carrying two loans, and both banks look at the same income.
- A second ready property bought by an expat with a mortgage needs at least 40% down (60% LTV) plus about 4% DLD fee and other costs.
- Off-plan instalments are paid from your own funds during construction, so released cash is a way to fund them. The bank for the final handover mortgage will count the equity release payment in your DBR.
- The Central Bank says a purchase down payment should come from the buyer's own resources, not personal loans or credit cards. Equity released through a mortgage on your own property is generally treated differently, but confirm with the second lender before you sign anything.
On an off-plan unit itself, equity cannot be released before handover. The way to use a gain before completion is to sell. One real case: a 2-bedroom, 135 m² in UH East by Ellington (JLT), bought in February 2024 for AED 2,545,000 on a 70/30 plan, was resold in January 2026 before handover for AED 3,100,000. About AED 1,374,000 had been invested by then (half the price plus 4% DLD). Net profit after 2% commission was about AED 493,000, or +36% on invested capital over 23 months, about 17% a year. It closed before the 2026 conflict, and past results do not guarantee future returns. The trade-offs between the two routes are in off-plan vs ready property.
Buy-out: moving the loan to get a lower rate
A buy-out moves your existing mortgage to another bank, usually for a lower rate, with or without extra cash on top. It makes sense when the rate saving over the next few years is larger than the switching costs.
The Central Bank says there should be no obstacle to refinancing with another bank, and it caps the early settlement fee at 1% of the outstanding balance or AED 10,000, whichever is less. On an outstanding loan of AED 1,200,000, moving from 5.5% to 4.2% saves roughly AED 15,000 in interest in the first year. Switching costs (settlement fee capped at AED 10,000, 0.25% DLD registration of AED 3,000, valuation and any arrangement fee) are often recovered within one to two years. The best moment is usually when your fixed period ends and the loan is about to move to a higher variable rate. Rates in autumn 2026 are in the Dubai mortgage guide.
Risks to weigh
Equity release turns property value into debt, so the main risk is leverage. Weigh these points before you apply.
- Higher monthly payments, and after a fixed period the rate moves with EIBOR.
- Your DBR capacity is used up, which can block a mortgage you may want later.
- A lower valuation means less cash. In 2026 Dubai prices were about 1.7% below a year earlier and Q3 sales fell about 45% after the regional conflict began, so valuers are careful.
- If you earn in a currency other than dirhams or dollars, exchange rates change your real payment.
- If the released money goes into off-plan, it is tied up until handover or resale.
I usually suggest releasing only what a specific purchase needs and keeping a cash reserve of several months of payments. Deals go through FOR YOU Real Estate, a licensed Dubai agency. This guide is general information, not financial or legal advice. To check how much you could release, send me your property details.
