UAE mortgage cap effect: Banks inform clients old pre-approval letters cancelled

Following the UAE Central Bank’s move to restrict home loans to expats to 50 per cent of a property's value, banks on Monday started informing customers that the old mortgage pre-approval letters stand cancelled and new loan-to-value (LTV) ratio stand as per the Apex Bank’s directive, two bankers told Emirates 24/7.

“There was a meeting of our sales person last (Sunday) night and we were informed to tell our customers that their pre-approval letters stand cancelled. From January our LTV will be only 50 per cent of the home value,” the banker said on conditions of anonymity.

“The applications being processed at the older LTVs will go ahead, but all our sales agents have been advised to market our product as the Central Bank guideline.”

The banker said that their bank was planning to return full or half the amount of the preapproval processing charges to the customers if they decline the new approval letter.

Banks in the UAE charges as much as Dh5000 to process and issue mortgage pre-approved letters.