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Which Mortgage Rates are Better for You – Fixed or Variable?

The Dubai mortgage Market has never been more accessible for the Expats in Dubai in years as compared to currently. People suddenly have considered buying rather than rent a property in Dubai. If you are looking to purchase your property in Dubai, one of the major factors in making this move be in your favor is to decide which mortgage rates you want a fixed-rate mortgage on your property or a variable-rate mortgage.

But the only question that arises at this point is what if a fixed rate and a variable rate mortgage?

The answer to the statement is answered below by our highly experienced Mortgage Brokers in Dubai.

  • What is a Fixed Rate in Mortgage Rates?

A fixed mortgage is mostly considered by all the loaning agencies in the whole world. A fixed-rate mortgage is where the rate of interest that you are paying or will pay remains the same for a certain amount of time. The time usually lasts from one to five years.

Since any facility of mortgage rates have both pros and cons, a fixed-rate mortgage too has some which are listed below:


The rate that you fix the first day remains the same till your last installment. Whether the band’s interest rate increases, your monthly installment rate will remain the same.

You can easily organize your monthly budget once you have fixed your mortgage monthly installment. When once the mortgage rate is set, you can easily set that amount aside for paying ff the bank and use the rest for your domestic expenditures.


Paying a fixed amount of mortgage monthly installment might be an advantage at the start but at the same time, this advantage can be your disadvantage when you are at your last installments.

A reversion rate can be quite high than the amount you have fixed as your monthly mortgage rate. If you become used to budgeting your monthly expenses, paying extra out of nowhere can be a little difficult than anticipated.

  • What is a Variable Rate?

A variable rate mortgage is where the mortgage rates can change regularly, whether the rate goes up or down. The variation in the rate depends upon the EIBOR– Emirates Interbank Offered Rate. The amount added by the officials plus the fixed percentage added by your lender is what the variable rate mortgage is composed of.

This mortgage rate too has some pros and cons which are elucidated further,


The main advantage to a variable rate mortgage is that your rate can drop which means that at any point, your payments can decrease. This concludes that over the lifetime of your mortgage, you could pay less than what you initially thought you would.

Whether you want a Short or Long-term mortgage, a fixed-rate mortgage can come with a heavy price once the term ends in the form of a reversion rate. This is something you avoid when you take out a variable mortgage. If you take out a long mortgage on a variable rate, your payments could decrease or only rise slightly throughout the mortgage.


The flipside to having a variable rate mortgage is that your mortgage rate can rise, which would have a direct impact on your monthly payments. For example, if you pay AED 3000 one month, there is a possibility that you might have to be paying more than AED 5000 or potentially, even more, the next month.

There’s no predictability, therefore, if you strongly believe in sticking to a budget, a variable rate can make this very difficult. You won’t be able to accurately predict how much you need to set aside each month to make your payments.

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