What this refinance calculator does
In the UAE, refinancing is usually called a buyout: a new bank pays off your existing mortgage and you continue with them on a fresh loan, normally at a lower rate. The headline rate cut is the easy part to see. The harder question — and the one this tool answers — is whether the saving isworth it once you've paid the costs of switching.
Enter your outstanding balance, your current rate and the years remaining, then the new rate and new term you've been offered, plus any switching costs. The calculator returns your current versus new monthly payment, the monthly saving, an itemised list of the one-off costs, the break-even point (how many months of saving it takes to recover those costs), and the net saving over the remaining life of the loan.
The switching costs to enter
A buyout is rarely free, but the costs are smaller and more predictable than most borrowers assume. There are four to weigh up:
- Early-settlement fee — capped. The Central Bank caps the early-settlement fee on your existing mortgage at the lower of 1% of the outstanding balance or AED 10,000. So on a AED 1.5M balance, 1% would be AED 15,000 — but the cap means you pay no more than AED 10,000. This single rule is why switching is far cheaper than the "exit penalty" myth suggests.
- New bank arrangement fee — practice, varies. The new lender often charges a processing or arrangement fee, typically 0–1% of the balance + VAT. Some banks waive it entirely to win your business, so confirm the current figure for your specific offer rather than assuming.
- Property valuation — practice, ~AED 2,500–3,500 + VAT. The new bank re-values the property as part of approving the loan. The exact amount is set by the bank and its valuer.
- DLD mortgage re-registration — 0.25% of the loan + AED 290. The old lender's charge is discharged and the new one registered at the Land Department. As a government registration fee, it is based on the new loan amount, not the property price.
Only the early-settlement cap is a Central Bank rule. The arrangement fee, valuation and exact waivers are bank practice — they move from lender to lender and from promotion to promotion, so treat the defaults as a starting point and confirm the live numbers before you commit.
How to read the break-even point
The break-even point is the heart of the decision. It divides your total one-off switching costs by your monthly saving to tell you how many months it takes before the move starts paying you back. If switching costs AED 13,000 all-in and you save AED 1,100 a month, you break even at roughly twelve months — and every month you keep the loan after that is money in your pocket.
The rule of thumb: a buyout is worth it when the interest you'll save over the time you actually plan to keep the loan comfortably exceeds the switching costs. If you might sell or settle the property a year from now, a long break-even can wipe out the benefit. On a large balance, even a 1% rate cut often clears the costs within a year or two — but always check the break-even against your own horizon, not a generic one.
The term-extension trap
Watch the new term field carefully. A common way to make a buyout look more attractive is to stretch the loan back out — re-setting a loan with 18 years left to a fresh 25-year term. That cuts the monthly payment sharply, which feels like a big win, but you're now paying interest for seven extra years. The lower monthly figure can quietly cost you more total interest than you started with.
To compare like with like, set the new term to roughly the same number of years you have left. If you do choose to extend, judge the deal on the net saving over the term and the total interest — not on the monthly figure alone. The monthly saving sells the buyout; the total-interest number tells you the truth.
A worked example
Say you owe AED 1,500,000 with 20 years remaining at 5.5%, and you're offered 4.25% over a matched 20-year term. The lower rate trims a few thousand dirhams a year off the interest and reduces the monthly payment. Against that, you'd pay the capped early-settlement fee (AED 10,000 here, since 1% would exceed the cap), the DLD re-registration (0.25% of the loan + AED 290), the valuation and any arrangement fee. The calculator nets all of it off so you can see the break-even in months and what you keep over the full 20 years — rather than guessing.
Where to go next
This tool sits alongside the rest of the suite. Browse all calculators, size a brand-new loan with the payment calculator, or check whether a larger refinanced loan still fits the Central Bank affordability rules with the eligibility calculator. For the full background on buyouts — releasing equity, the fee cap and the process — read the guide on refinancing your UAE mortgage.
This calculator is for estimation only — not financial advice. Rates, fees and bank practices change; confirm the current figures with your lender before deciding.