The letter most borrowers ignore
Somewhere between three and five years after you signed your mortgage, the bank sends a letter. It says your fixed period is ending and your rate will now be three-month EIBOR plus a margin. Most people file it. The monthly payment goes up on the next statement, and it stays up for years.
If you bought between 2021 and 2023, that letter is arriving now. This is what it actually costs, and what you can do about it.
What reversion means in 2026
EIBOR is the rate at which UAE banks lend to each other, and it is the benchmark almost every variable mortgage in the country is priced from. On 3 September 2026 the three-month rate stood at 4.00%. The one-month rate was 3.81%, the six-month 4.11% and the twelve-month 4.34%.
Your bank adds a margin to that. Recent bank circulars put reversion margins at roughly 1.5% to 2.5% over three-month EIBOR, often with a floor rate underneath. Salary-transfer customers usually sit at the lower end. Non-salary-transfer customers sit higher; a margin of 1.89% is a common figure. So a borrower reverting today is typically paying somewhere between 5.5% and 6.5%.
Compare that with what banks are offering on new fixed deals. Indicative three-year fixed rates in August 2026 were 3.89% at Emirates NBD, 3.94% at Mashreq, 3.95% at ADCB and ADIB, 3.96% at FAB, 3.97% at DIB, 3.98% at RAKBANK and 3.99% at CBD, according to a comparison by Lenddoo. These are indicative, not quotes, and they depend on your profile. But the gap between a reversion rate near 6% and a new fix near 4% is the whole story.
What that gap costs on a real loan
Take an outstanding balance of AED 1.5 million with 20 years left.
- At a reversion rate of 5.9%, the monthly payment is about AED 10,660.
- At a new fixed rate of 3.95%, it is about AED 9,050.
That is roughly AED 1,600 a month, or AED 19,000 a year. Over a three-year fixed period the difference is close to AED 58,000. These figures are rounded and assume a standard repayment mortgage; your own balance and term will move them, but the shape holds. Run your numbers in our mortgage calculator to see your monthly figure at both rates.
What switching actually costs
Refinancing is not free, and a good decision starts by pricing it honestly.
- Early settlement fee to your current bank. The Central Bank caps this at 1% of the outstanding balance or AED 10,000, whichever is lower. On AED 1.5 million, that is AED 10,000.
- Arrangement fee at the new bank. Usually around 1% of the loan, so about AED 15,000. Some banks discount this to win buy-out business, so ask.
- Valuation. AED 2,650 to AED 3,150 at current bank tariffs.
- Mortgage re-registration with the Dubai Land Department. 0.25% of the loan plus AED 290, so about AED 4,040.
Total: a little over AED 32,000. Against a saving of around AED 19,000 a year, the switch pays for itself in roughly 20 months. Over a three-year fix you finish about AED 26,000 ahead, before counting any protection the new fix gives you if rates rise further. If the numbers on your loan are smaller, the payback period is longer, which is why we do not recommend switching to everyone.
The option nobody mentions: ask your own bank first
Before moving to another lender, ask your current bank for a new fixed rate. Banks do not advertise this, but most will reprice an existing customer rather than lose the loan to a buy-out. If they agree, you avoid the early settlement fee, the valuation and the DLD re-registration. You may still pay a smaller arrangement fee. The offer will rarely be as sharp as the best new-customer rate in the market. So get a competing offer in writing first, then take it to your bank.
Things that catch people out
The floor rate. Several bank circulars include a floor under the variable rate. If EIBOR falls, your rate may not follow all the way down. Check whether your reversion terms include one.
The debt burden ratio still applies. A refinance is a new credit assessment. Your total monthly repayments, including the new mortgage, need to stay under 50% of your income. If your circumstances changed since you first borrowed, get this checked before you pay for a valuation.
Deferred instalments from the spring. The Central Bank's support package allowed banks to defer repayments for up to six months during the conflict, and more than 60,000 individuals used it. If you took a deferral, ask your bank how the deferred amounts were added back to the loan. It affects your outstanding balance, and therefore every number above.
Reversion terms on the new deal. The new fixed period will end too. Compare the margin you will revert to, not only the headline fixed rate. A slightly higher fix with a lower reversion margin can be the better loan.
How the process runs
Pre-approval from a new bank takes 24 to 48 hours and costs nothing. Completion usually takes two to four weeks: the new bank values the property, issues the facility letter, settles your existing loan, and the mortgage is re-registered with the Dubai Land Department. Your payments to the old bank continue until the settlement date, so there is no gap. If you also want to release some equity while you switch, that is handled in the same application; our cash-out refinance page explains how much can be released.
Our refinance service compares buy-out offers across the major UAE banks and shows you the net saving after every fee above. If the answer is that you should stay where you are, we will tell you that.
One last thing about timing
Forecasts for three-month EIBOR through 2026 have mostly sat in a corridor of about 3.45% to 3.95%, and the September reading came in slightly above it. Nobody knows the path from here. What you do know is your own reversion date and your own margin. If the gap between your reversion rate and the fixed rates above is more than half a percentage point, it is worth an hour of your time to get it priced.