2023-07-04 20:48:09
Yesterday, the Central Bank of the United Arab Emirates issued a notice to all banks and finance companies operating in the country, explaining the measures taken to ease the burden of increasing interest rates on residential mortgage loans for citizens “non-investment properties.”
The measures taken, which will enter into force as of the first of July 2023, include residential real estate loans, whose deductions from the salary increased, and the banks did not postpone any of the interest until after payment, as well as loans whose deductions from the salary did not increase, and the banks postponed the accrued interests. them as a result of higher interest rates.
The Central Bank stated that for bank customers with a monthly income of 40,000 dirhams and above, banks will be allowed to exceed the percentage of deduction from salary or income currently specified in the system by 50% to cover the increase in interest rates, with a maximum of 60%, provided that banks bear the uncovered interest. The remaining due to the increase in interest rates, with the necessity of not extending the period.
He also clarified that for bank customers with a monthly income of less than 40,000 dirhams, banks will be allowed to extend the repayment period to cover the increase in interest rates, up to a maximum of 30 years, while maintaining the percentage of deduction from salary or income at 50% according to what is currently in force, provided that they bear Banks charge the remaining uncovered interest as a result of higher interest rates.
The issuance of this notice comes after the approval of the Central Bank’s Board of Directors on measures to reduce the burdens of increasing interest rates on residential mortgage loans for citizens in light of the results of a study of the impact of rising interest rates on the assets, investments and customers of banks with the participation of a number of banks, and after consultations that took place with banks through the Union of Banks. Emirates in this regard
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