Key takeaways
- Refinancing surge: Refinancing and loan top-ups accounted for approximately 50 per cent of all home loans in Q2 2026, increasing 15.9 per cent quarter-on-quarter and 4.8 per cent year-on-year.
- Property breakdown: Apartments represented approximately 63 per cent of financed transactions, while villas accounted for 30 per cent.
- Rate differentials: Borrowers face variable EIBOR-linked rates of 5.25 per cent to 6.25 per cent after promotional fixed-rate periods expire, driving demand for bank buyout offers starting at around 3.79 per cent.
- Equity release: Strong capital appreciation in recent years is encouraging homeowners to unlock property equity for refurbishments or portfolio diversification.
What is driving the sharp rise in Dubai mortgage refinancing?
Featured in ZAWYA, recent market analysis indicates that Dubai's home financing market is undergoing a structural shift towards refinancing and equity release. While overall mortgage-backed purchase volumes have moderated from their 2025 highs, conversion rates and loan values have remained strong.
Haider Tuaima, Managing Director and Head of Real Estate at ValuStrat, noted that refinancing and mortgage top-ups represented approximately 50 per cent of all home loans during the second quarter of 2026. "Apartments represented about 63 per cent of mortgage transactions, while villas accounted for 30 per cent," Tuaima explained. He added that the trend reflects borrower expectations regarding future interest rate movements, alongside a desire among existing homeowners to capitalise on substantial property equity accumulated during the recent market cycle.
How are homeowners capitalising on buyout rates and equity release?
The primary incentive for refinancing lies in the gap between expiring introductory terms and current bank buyout campaigns. Borrowers whose original fixed-rate periods of two to five years are ending now face variable rates pegged to EIBOR, typically ranging from 5.25 per cent to 6.25 per cent. In contrast, competitive buyout offers have brought fixed rates down to between 3.79 per cent and 4.39 per cent, creating potential monthly interest savings.
At the same time, elevated property valuations have enabled homeowners to undertake cash-out refinancing at loan-to-value (LTV) ratios of up to 75 to 80 per cent. Owners are increasingly redeploying this released liquidity to fund home upgrades or acquire secondary properties at attractive price points, reinforcing the role of mortgage financing as part of broader wealth management strategies.
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