Dubai Mortgage Calculator: Monthly Payments, Amortisation, and Overpayment Strategy (2026)

A mortgage calculator is one of the most used — and most misunderstood — tools in property finance. Most people plug in a loan amount and get a monthly payment. Stop there, and you miss three decisions that can save or cost you tens of thousands of dirhams over the life of the loan. Here is how to use a mortgage calculator strategically, with Dubai-specific context.

How Dubai Mortgage Payments Are Calculated

Dubai banks issue mortgages on a reducing-balance basis, which means interest is charged each month on the outstanding principal — not the original loan. The standard formula is: Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1] Where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. On a AED 1,400,000 loan at 4.5% over 25 years, this produces a monthly payment of approximately AED 7,720. Over 25 years, you repay AED 2,316,000 — meaning AED 916,000 goes to interest. This is why the amortisation schedule matters.

Reading the Amortisation Schedule

An amortisation schedule shows you exactly how each payment splits between principal reduction and interest. In year one of a 25-year Dubai mortgage, roughly 68% of every payment goes to interest and only 32% reduces the principal. By year 15, the split reverses. This has two important implications: First, early years are expensive in real terms for buyers who plan to sell within 5 years — you reduce your principal slowly while paying heavily into interest. Second, overpayments made early deliver a nonlinear benefit — each dirham of early principal reduction eliminates all future interest that would have compounded on that amount.

The Overpayment Strategy

Most UAE fixed-rate mortgage contracts allow up to 10–20% of the outstanding balance as annual overpayments without early redemption penalty. For variable-rate mortgages, many allow unlimited overpayments. If you overpay AED 20,000 per year on the AED 1,400,000 example above, you reduce the loan term by approximately 4.5 years and save around AED 148,000 in interest — a guaranteed after-tax return of 4.5% on every dirham overpaid, since there is no tax on savings in the UAE. The Altamimi Mortgage Calculator lets you input an annual overpayment figure and immediately shows the recalculated term and total interest saved.

Refinancing: When the Numbers Work

Refinancing replaces your existing mortgage with a new loan — typically at a lower interest rate, a new fixed period, or a restructured term. The break-even calculation is: Break-Even Months = Total Refinancing Costs ÷ Monthly Interest Saving Refinancing costs in Dubai typically include: bank arrangement fee (0.5–1% of new loan), DLD mortgage release fee (AED 1,290), new mortgage registration fee (0.25% of new loan + AED 290), and legal/notary fees (~AED 2,000). On a AED 1.2M refinance at a saving of AED 650/month and costs of AED 18,000, break-even is 27 months. If you plan to hold for longer than that, refinancing pays. Our calculator computes this break-even precisely for your numbers.

Fixed vs Variable Rate in the UAE: 2026 Context

Most UAE banks offer an initial 2–5 year fixed period, then revert to EIBOR (Emirates Interbank Offered Rate) + spread. With EIBOR elevated through 2024–2025, fixed-rate products offered 4.35–4.75% for 5-year fixed periods. If EIBOR falls in 2026–2027 (anticipated by several UAE bank economists), existing variable-rate borrowers benefit automatically. Fixed-rate borrowers may want to refinance if rates fall significantly. Model both scenarios in the calculator to see the 10-year net difference for your specific loan balance.

UAE Mortgage Rules You Must Know

Key Central Bank of UAE rules that directly affect your calculation: • Maximum LTV: 80% for expats on properties under AED 5M (20% down). 70% for expats on AED 5M+. • Maximum DBR: 50% of gross monthly income. All existing debt payments count. • Maximum term: 25 years for salaried, or age 65 at loan end (whichever comes first). • Off-plan restriction: Mortgages are generally not available on off-plan property until handover and title deed issuance. These rules set the outer boundaries of what a bank will offer. Use the Affordability Calculator to check your maximum borrowing power under DBR rules before running mortgage scenarios.

Using the Calculator: Step by Step

Open the Dubai Mortgage Calculator at roi.altamimirealestate.com/mortgage. Enter your loan amount (purchase price minus down payment), interest rate, and term. The calculator immediately shows: monthly payment, total interest payable, and a year-by-year amortisation breakdown. For overpayment analysis: enter your planned annual lump-sum overpayment. The calculator recalculates the effective term and total interest saved. For refinancing: enter your current loan balance, current rate and remaining term, then your proposed new rate and refinancing costs. The calculator returns your monthly saving and break-even month. This is the single most impactful number for deciding whether to refinance now or wait.