Asan Tata— November 2, 2026More Dubai homebuyers are paying cash. New figures from property brokerage Betterhomes show that cash purchases made up 44 per cent of its residential sales in the third quarter of 2026. That is up from 36 per cent in the second quarter. At the same time, the share of mortgage-backed deals fell to 56 per cent, down from 64 per cent.
The shift comes as borrowing costs face fresh upward pressure. The Central Bank of the UAE raised its Base Rate from 3.65 per cent to 3.90 per cent, effective 17 September 2026. Banks are now expected to tighten the affordability tests they use when they decide how much a buyer can borrow.
This article explains what the figures mean, why cash is gaining ground, and what buyers should check before committing.
Quick Answer
Cash purchases were 44 per cent of Betterhomes residential sales in Q3 2026, up from 36 per cent in Q2, while mortgage-backed deals still fund the majority at 56 per cent. Across the wider market, cash plays a much bigger role, because most sales are off-plan deals on developer payment plans. The Central Bank’s Base Rate stands at 3.90 per cent after a 0.25 point rise in September 2026. Buyers without a final mortgage offer could see revised offers, and borrowing capacity may fall even if headline rates move only slightly.
The Numbers Behind the Shift
Betterhomes is one of Dubai’s largest brokerages, so its figures give a useful snapshot of how buyers are paying.
| Period | Cash purchases | Mortgage-backed purchases |
|---|---|---|
| Q1 2026 | Below 50 per cent | Above 50 per cent |
| Q2 2026 | 36 per cent | 64 per cent |
| Q3 2026 | 44 per cent | 56 per cent |
The Q3 cash share is still below the mortgage share here. But in three months, cash gained eight percentage points. Betterhomes links this to a deep pool of buyers who can complete a purchase without bank finance, which gives the market resilience when borrowing gets dearer.
Why the Central Bank Move Matters
On 16 September 2026, the Central Bank of the UAE announced that it would raise its Base Rate by 25 basis points, from 3.65 per cent to 3.90 per cent, effective Thursday 17 September. The decision followed a move by the US Federal Reserve on the same day. The dirham is pegged to the US dollar, so the Central Bank’s Base Rate is anchored to the US Federal Reserve’s rate.
The Base Rate is the rate that applies to the Central Bank’s Overnight Deposit Facility. It signals the general stance of monetary policy and sets a floor for overnight money market rates. It is not itself a mortgage rate. Your own mortgage rate depends on your product, your contract, and whether your rate is fixed or variable.
The Central Bank then held the Base Rate unchanged on 28 October 2026, so it still stands at 3.90 per cent.
Stress tests, not just headline rates
Betterhomes does not expect major changes to standard fixed-rate mortgage products. Minor adjustments are expected in the fourth quarter of 2026. The more immediate impact, according to the brokerage, could be on how much buyers can borrow.
Banks use a stress-test rate when they assess eligibility: a higher rate than the borrower will pay at first, testing whether the loan stays affordable if rates rise. If banks raise their stress-test rates, buyers may qualify for smaller loans, even if the mortgage rate on offer barely changes.
Buyers without a final offer letter by end-October could receive revised offers: a summer pre-approval may not match the final offer now.
Cash Dominates the Wider Market
Across Dubai’s whole residential market, cash-funded deals are far more common than Betterhomes’ figures suggest. The reason is the structure of the market itself. Most Dubai sales are off-plan properties, bought from developers on staged payment plans. Those plans let buyers spread payments over several years without taking out a bank mortgage at all.
Saad Hussain, chief executive of Alaia Developments, cautioned against blaming interest rates alone. He said Dubai’s continued cash dominance cannot be attributed exclusively to interest rates, pointing to the large volume of off-plan transactions.
The research figures reported alongside the Betterhomes data tell the same story:
- Hamptons research found that about 83 per cent of Dubai residential transactions in December 2025 were cash-funded: 14,582 cash purchases against 3,014 mortgage-financed sales.
- By March 2026, the cash share had fallen to about 76 per cent: 9,857 cash purchases against 3,108 mortgage-backed transactions.
- Engel & Völkers data shows that off-plan properties made up about 71.3 per cent of Dubai’s residential sales in the first half of 2026.
- Reidin’s August 2026 analysis of the ready-property market found a much closer split: about 47 per cent of ready-property purchases were mortgage-backed, and 53 per cent were completed without mortgage finance.
Fixed Rates Still Look Attractive
Competition among UAE banks has kept fixed-rate mortgages appealing through 2026. Some lenders have advertised introductory fixed rates starting at about 3.75 per cent, with three-year packages at around 3.89 to 4 per cent. Actual offers depend on the borrower’s eligibility and the lender’s terms, so these are advertised starting points, not rates every buyer will receive.
Fixed-rate borrowers are generally protected from rate changes for their fixed period. Variable-rate borrowers may see repayments change at repricing. Homeowners whose fixed periods have ended can find refinancing incentives, including waived processing and valuation fees.
An illustrative example reported with the new figures shows how much cheaper borrowing has become since early 2024, even with the recent Base Rate rise. The example uses three-month Eibor plus a 1 per cent bank margin as the indicative borrowing rate.
| Period | Indicative borrowing rate | Monthly repayment on a Dh1.6 million loan over 25 years |
|---|---|---|
| Q1 2024 | 6.30 per cent | About Dh10,604 |
| Q1 2025 | 5.30 per cent | About Dh9,635 |
| Q2 2026 | 4.74 per cent | About Dh9,113 |
The example assumes a Dh2 million property with a 20 per cent down payment, leaving a Dh1.6 million mortgage over 25 years. The gap between early 2024 and mid-2026 is about Dh1,491 a month, or nearly Dh17,900 a year. These are indicative figures, not offers. Hussain warns that fixed-rate borrowers do not automatically benefit from lower rates, and cheaper finance does not always mean better affordability if prices and transaction costs move the other way.
How Much You Can Borrow Under Central Bank Rules
The Central Bank of the UAE sets the maximum loan-to-value ratios that banks must follow. Banks can be stricter than these limits, but they cannot go beyond them. The limits depend on nationality, whether it is a first or later property, and the property’s value.
| Buyer and property | Maximum mortgage | Minimum deposit |
|---|---|---|
| UAE national, first home up to Dh5 million | 85 per cent | 15 per cent |
| UAE national, first home above Dh5 million | 75 per cent | 25 per cent |
| UAE national, second or investment property | 65 per cent | 35 per cent |
| Expatriate, first home up to Dh5 million | 80 per cent | 20 per cent |
| Expatriate, first home above Dh5 million | 70 per cent | 30 per cent |
| Expatriate, second or investment property | 60 per cent | 40 per cent |
| Off-plan property, any buyer | 50 per cent | 50 per cent |
Two more Central Bank limits apply at the same time. The maximum mortgage term is 25 years. The maximum financing amount is up to seven times annual income for expatriates and up to eight times for UAE nationals. The debt burden ratio, which caps total monthly debt repayments against income, is generally 50 per cent. The lowest of these limits decides how much you can actually borrow, so a buyer who passes the deposit test can still be limited by income or by the debt burden test.
Cash Buyer or Mortgage Buyer: What to Check
If you are paying cash
Confirm your funds are ready in full, including fees, before you sign. Cash buyers often move faster, which can help in a negotiation, but speed is not a substitute for checks. Verify the title deed, the seller’s ownership, and any outstanding service charges. For off-plan purchases, read the payment plan carefully: staged payments still commit you to the full price.
If you are taking a mortgage
Get your final mortgage offer in writing before you commit, not just a pre-approval. Ask the bank to confirm the stress-test rate it used and whether the offer could change before completion. Compare fixed and variable products on total cost over the fixed period, and ask about processing, valuation, life and property insurance fees, which add to the real cost.
Steps for a mortgage purchase in Dubai
- Check your eligibility: deposit, income multiple, and debt burden ratio under Central Bank rules.
- Get a pre-approval from a bank or mortgage adviser, stating the maximum loan and the rate type.
- Agree the purchase price and sign the memorandum of understanding with the seller.
- Complete the bank valuation and secure the final mortgage offer letter.
- Transfer the property at the Dubai Land Department and register the mortgage.
- Begin repayments on the agreed schedule, and note the date your fixed period ends.
What This Means for Buyers Now
The message is balanced. Mortgages still fund the majority of sales at a major brokerage, and banks still compete for business, including refinancing and buyouts. At the same time, more buyers pay cash, and banks may tighten affordability tests ahead.
The practical lesson is simple. Do not rely on an old pre-approval: confirm borrowing capacity at today’s stress-test rates and get the final offer before committing. For cash buyers, speed helps only when the legal and financial checks are already done.
Frequently Asked Questions
Are most Dubai homes really bought with cash?
Across the whole market, cash dominates, because most sales are off-plan deals on developer payment plans. In the ready-property market the split is close to even: about 47 per cent mortgage-backed and 53 per cent without mortgage finance, per Reidin’s August 2026 analysis.
What is the UAE Central Bank Base Rate now?
The Base Rate is 3.90 per cent. It was raised from 3.65 per cent effective 17 September 2026, and it was held unchanged on 28 October 2026. The Base Rate is a policy rate, not a mortgage rate, and it does not change every mortgage automatically.
Will my mortgage offer change because of the rate rise?
It can. Banks may raise stress-test rates, reducing how much you qualify to borrow, and buyers without a final offer letter by end-October could receive revised offers. Fixed-rate borrowers are protected for their fixed period; variable-rate borrowers may see repayments change at repricing.
How much deposit do I need for a Dubai mortgage?
Under Central Bank rules, an expatriate buying a first home up to Dh5 million can borrow up to 80 per cent, so the deposit is 20 per cent. For a UAE national the maximum is 85 per cent, so the deposit is 15 per cent. Higher-value, second and off-plan properties need larger deposits.
Is it better to pay cash or take a mortgage in Dubai?
Neither suits everyone. Cash avoids interest and can speed up a deal, but it ties up a large sum. A mortgage keeps cash free, but it adds interest, fees and insurance costs, and borrowing capacity depends on the bank’s affordability tests. Compare the total cost of each route before deciding.
Should I wait for rates to fall before buying?
There is no clear signal of materially lower rates soon. The Central Bank held its Base Rate on 28 October 2026, and analysts expect only minor fixed-rate adjustments in the fourth quarter. Waiting carries its own risk, as prices and availability can move meanwhile.
Disclaimer
This article is for general information only, not financial advice. It promises no mortgage rate, approval or property outcome. Brokerage and research figures describe their own samples and periods, not the whole market. Rates, fees and eligibility vary by lender and borrower and can change, so confirm current terms with your bank or a licensed mortgage adviser before deciding.
Last Updated: 2 November 2026
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