A quarter-point rise costs a typical Dubai borrower about AED 180 a month on a AED 1.2 million loan, and only once the loan reprices. The Central Bank of the UAE moved its base rate from 3.65% to 3.90% with effect from 17 September 2026. On a variable rate you'll see it at your next reset date. On a fixed rate you'll see it when the fixed period ends.
The dirham is pegged to the US dollar, so the UAE base rate follows the Federal Reserve. This rise followed the Fed's first increase since 2023, Gulf News reported.
What moved, and by how much?
Table: UAE policy and money-market rates, September–October 2026. Source: Central Bank of the UAE; Gulf News (16 September 2026).
| Rate | Date | Level |
|---|---|---|
| CBUAE base rate | to 16 Sep 2026 | 3.65% |
| CBUAE base rate | from 17 Sep 2026 | 3.90% |
| 3-month EIBOR | 1 Oct 2026 | 4.39% |
| 3-month EIBOR | 2 Oct 2026 | 4.22% |
| 3-month EIBOR | 5 Oct 2026 | 4.30% |
For most borrowers, three-month EIBOR matters more than the base rate. Variable home loans in Dubai are usually priced at three-month EIBOR plus a margin, and the margin is set by the bank, so it differs by lender and by borrower. EIBOR is a market rate and moves every working day. In the first week of October it went from 4.39% to 4.22% and back up to 4.30%.
What does a quarter point cost?
We ran the sums for a 25-year repayment loan. AED 1.2 million is close to the median purchase mortgage registered in Dubai this year: the monthly median sat between AED 1.14 million and AED 1.26 million from March to September. The rates below are examples, not quotes.
Table: monthly repayment on a 25-year repayment mortgage at example rates. Arithmetic only; not an offer or forecast.
| Loan | 5.25% | 5.50% | 5.75% | 6.00% |
|---|---|---|---|---|
| AED 1,000,000 | AED 5,992 | AED 6,141 | AED 6,291 | AED 6,443 |
| AED 1,200,000 | AED 7,191 | AED 7,369 | AED 7,549 | AED 7,732 |
Each 0.25 points adds about AED 150 a month for every AED 1 million borrowed. On AED 1.2 million, going from 5.50% to 5.75% adds AED 180 a month, about AED 2,160 a year. You'd notice it, but it is small next to the deposit rules further down.
Landlords feel it more, because the extra payment comes out of the rent. Our rental yields page shows gross yields by area; take off service charges and your own loan costs before you compare.
Are buyers still borrowing?
So far, yes. September shows no pull-back, though it's early. A mortgage reaches the land record some weeks after the bank agrees it, so a rate change takes time to show up.
Table: purchase-mortgage registrations on Dubai homes, March–September 2026, with the median loan. n = registrations in our records. Source: DLD registered mortgages, Peak Trust Research.
| Month (2026) | Registrations (n) | Median loan (AED) |
|---|---|---|
| March | 2,851 | 1,136,000 |
| April | 1,806 | 1,192,375 |
| May | 1,323 | 1,200,000 |
| June | 1,657 | 1,240,948 |
| July | 2,114 | 1,258,997 |
| August | 1,939 | 1,200,000 |
| September | 2,218 | 1,220,000 |
Table: purchase-mortgage registrations by ISO week, August–September 2026. Source: DLD registered mortgages, Peak Trust Research.
| Week (Mon start) | Registrations |
|---|---|
| W34 (17 Aug) | 461 |
| W35 (24 Aug) | 427 |
| W36 (31 Aug) | 516 |
| W37 (7 Sep) | 479 |
| W38 (14 Sep, rise on 17 Sep) | 576 |
| W39 (21 Sep) | 464 |
| W40 (28 Sep) | 498 |
September's 2,218 registrations were the most in any month since March. Weeks 38 to 40, which take in the rise, averaged 513 a week against 471 in the four weeks before. Some buyers may have hurried to lock in a rate before banks repriced. Three weeks is too short to tell, and we'd want October and November in hand before reading much into it.
The counts cover new purchase loans only. Refinancing, mortgage modifications and loans to developers are left out. Our record feed changed in early 2026, so we compare counts only within 2026, from March.
On our own count, at least three in ten completed homes sold in Dubai in 2025 were bought with a mortgage. Off-plan is different. Most off-plan buyers pay the developer in stages, so a rate rise reaches them at handover, and only if they borrow then.
How much can you borrow?
The Central Bank caps the loan as a share of the price. For expatriate buyers the ceilings are:
Table: maximum loan-to-value ratios for non-UAE nationals, as of October 2026. Source: CBUAE Rulebook, Mortgage Regulations, Article 3.
| Purchase | Maximum loan | Minimum deposit on AED 2m |
|---|---|---|
| First home, up to AED 5m | 80% | AED 400,000 |
| First home, above AED 5m | 70% | n/a |
| Second home or investment property | 60% | AED 800,000 |
| Any off-plan purchase | 50% | AED 1,000,000 |
UAE nationals can borrow 85%, 75% and 65% on the first three lines. The rulebook calls all of these maximums and tells lenders to be more conservative where the risk is higher. That is why a buyer based abroad can be offered well under 80%: for non-residents, the bank sets the figure.
The deposit must come from your own resources, the rules say, and not from a personal loan or a credit card. On a AED 2 million second home that means AED 800,000 of your own cash, before the 4% transfer fee and other costs.
What it means for investors
- Read your loan contract, not the headline rate. Your reset date, your margin over EIBOR and the end of any fixed period decide when your payment moves and by how much.
- Run the rent at a higher rate. If a rental only works at today's rate, the margin is thin, so try it 0.5 points higher. Banks already stress-test new mortgages at 2 to 4 points above the loan rate under the Central Bank's rules.
- Watch the deposit as closely as the rate. On a second home or an off-plan unit, the deposit rules tie up far more cash than a quarter point costs.
- Compare margins between banks. A small difference in the margin over EIBOR can cost more than this rise did.
This isn't a forecast. Rates can move either way from here, and the Fed's next decisions set the direction for the dirham.
For an opinion on a specific purchase and how to finance it, see how we work with investors. For where off-plan and ready prices sit now, read our guide off-plan or ready in Dubai, and for last week's registered sales see the week 40 Market Pulse.