EQUITY RELEASE IN DUBAI
INTRODUCTION
Equity release is one of the most effective ways to unlock capital from property without selling the asset.
As property values increase and mortgages are gradually paid down, owners build equity — the difference between the property’s market value and the outstanding loan balance. This equity can be accessed through refinancing, allowing investors and homeowners to redeploy capital while retaining ownership of the asset.
In Dubai, where capital appreciation and rental yields have remained relatively strong across key segments, equity release has become an increasingly relevant strategy.
However, it is not simply a matter of extracting cash. It is a financing decision that directly impacts leverage, risk, and long-term returns.
This guide explains how equity release works in Dubai, when it makes sense, and how to approach it strategically.
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WHAT IS EQUITY RELEASE?
Equity release allows a property owner to borrow against the increased value of their property.
This is typically done by refinancing the existing mortgage and increasing the loan amount, subject to the lender’s loan-to-value (LTV) limits.
In simple terms:
Property Value – Outstanding Loan = Available Equity
A portion of this equity can be converted into usable capital, depending on lender criteria and the structure of the transaction.
HOW EQUITY RELEASE WORKS IN PRACTICE
Consider the following example:
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Original purchase price: AED 1,000,000
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Current market value: AED 1,400,000
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Outstanding loan: AED 600,000
If the lender allows a 70% LTV:
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Maximum loan allowed: AED 980,000
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Existing loan: AED 600,000
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Potential equity release: AED 380,000
This amount may be accessed through refinancing, subject to approval and the intended use of funds.
WHEN DOES EQUITY RELEASE MAKE SENSE?
1
PROPERTY VALUE APPRECIATION
Equity release is most relevant when property values have increased since purchase.
Without appreciation, there is limited additional equity to access.
2
LOAN BALANCE REDUCTION
As mortgage repayments reduce the outstanding balance over time, equity naturally increases.
This creates an opportunity to restructure the loan more efficiently.
3
FAVOURABLE LENDING CONDITIONS
Competitive interest rates and supportive lending conditions improve the viability of equity release.
4
CLEAR USE OF CAPITAL
Equity release should always be driven by a defined objective, rather than simply access to funds.
HOW THE RELEASED EQUITY CAN BE USED
In Dubai, equity release is not unrestricted. Lenders apply controls on how released funds can be used, and approvals are typically easier when the purpose is clearly defined and aligned with property-related financing.
COSTS ASSOCIATED WITH EQUITY RELEASE
Equity release involves refinancing, so associated costs include:
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Early settlement fee (up to 1%)
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Valuation fee
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Bank arrangement fee (~1%)
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Mortgage registration fee (0.25%)
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Administrative costs
These costs must be factored into the overall decision.
KEY LENDING CONSIDERATIONS
CASH-OUT LIMITATIONS
Pure cash-out equity release, where funds are extracted without a clearly defined use, is the most restricted category.
Depending on the lender:
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Cash-out may be capped at a certain level
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Strong income and financial profile may be required
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The request may need to be justified in detail
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Some banks may not support this structure at all
This is why positioning the purpose of equity release correctly is critical.
AFFORDABILITY STILL APPLIES
Even when releasing equity, the loan must still meet standard affordability criteria.
This includes:
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Debt burden ratio limits
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Income verification
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Assessment of existing liabilities
The presence of equity alone does not guarantee access to funds.
LOAN-TO-VALUE (LTV) LIMITS
The amount of equity that can be released depends on:
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Residency status
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Property type
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Lender policy
Typical ranges:
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Residents: up to 70%–75%
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Non-residents: typically 50%–60%
INCOME AND CREDIT PROFILE
Lenders assess:
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Income stability
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Debt obligations
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Overall financial profile
PROPERTY ELIGIBILITY
Lenders favour:
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Completed properties
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Established developments
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Assets with strong transaction history
INTEREST RATE EXPOSURE
Variable rate loans expose borrowers to rising repayment costs if interest rates increase.
INCREASED LEVERAGE
Releasing equity increases total debt exposure, amplifying both potential returns and downside risk.
PORTFOLIO SCALING
Equity release can accelerate portfolio growth, but must be balanced against risk.
HOW WE SUPPORT EQUITY RELEASE STRATEGY
Equity release should be approached as part of a broader investment strategy.
At Mitchell’s Commercial Real Estate, we do not provide mortgage advice directly. Instead, we work with qualified mortgage advisors and lending partners to support clients through the process.
Our role focuses on:
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Assessing whether equity release aligns with your objectives
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Identifying when it makes financial sense
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Coordinating with appropriate mortgage advisors
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Supporting the wider investment strategy
This ensures that equity release is structured correctly and aligned with long-term outcomes.
FAQs
CAN I RELEASE EQUITY FROM MY PROPERTY IN DUBAI?
Yes, subject to lender approval, property valuation, and loan-to-value limits.
HOW MUCH EQUITY CAN I RELEASE?
Typically up to 70%–75% LTV for residents and 50%–60% for non-residents.
CAN I USE THE FUNDS FOR ANY PURPOSE?
No. Property-related uses are the most straightforward. Other uses are assessed on a case-by-case basis and may be restricted.
DO I NEED TO REFINANCE TO RELEASE EQUITY?
Yes. Equity release is usually achieved through refinancing.
HOW LONG DOES THE PROCESS TAKE?
Typically 2–4 weeks depending on the lender and documentation.
IS EQUITY RELEASE A GOOD IDEA?
It depends on how the capital is used. When structured correctly, it can enhance returns. If misused, it increases risk.