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Mortgages: practice questions in the style of the DLD broker exam

This topic tests whether a broker understands how mortgage finance affects a Dubai property transaction: who borrows and lends, how LTV and DBR limits work, which documents are needed, and how a mortgaged resale is completed. It also checks practical distinctions such as the bank’s NOC versus the developer’s NOC, mortgage registration, and Mortgage Release.

For brokers, mortgage knowledge helps set realistic expectations before Form F and registration stages, especially where a buyer needs pre-approval or a seller has an existing loan. In our 30-question training simulation, this topic usually represents about 0–1 question, based on the experience of our brokers; DLD does not publish an official topic-by-topic exam format.

Mortgage lending limits

Mortgage lending in the UAE is governed by CBUAE rules. The loan-to-value ratio (LTV) is the percentage of the property value that may be financed.

  • For a first ready home priced at up to AED 5 million, UAE nationals may borrow up to 85% and expatriate residents up to 80%.
  • For a first ready home above AED 5 million, the maximum LTV is 75% for UAE nationals and 70% for expatriate residents.
  • For second and subsequent homes, the maximum LTV is 65% for UAE nationals and 60% for expatriate residents, regardless of price.
  • For off-plan property, the CBUAE LTV limit is 50% for all borrower categories.
  • For non-residents, the CBUAE does not set a separate LTV ceiling; each bank determines its own conditions.

Affordability, term and age

Debt Burden Ratio (DBR) limits all of a borrower’s credit commitments, not only the mortgage payment.

  • DBR must not exceed 50% of gross income.
  • The bank must stress-test affordability using an interest rate 2–4 percentage points above the current rate.
  • For investment property, at least 2 months of rental income must be deducted in the affordability calculation.
  • The maximum loan amount is up to 8 annual incomes for UAE nationals and up to 7 annual incomes for expatriates.
  • The maximum mortgage term is 25 years.
  • The regulatory age limit at the final instalment was removed in 2019; the bank applies its own risk policy.

Mortgage steps in a resale transaction

  • The buyer should obtain bank pre-approval before progressing with a mortgage purchase.
  • The bank appoints the valuer. If the valuation is lower than the agreed sale price, the loan is calculated on the lower value and the buyer covers the difference.
  • For a seller with an existing mortgage, the seller requests a Liability Letter confirming the outstanding balance.
  • The property is blocked in the buyer’s interest at the Trustee office until the seller’s mortgage is repaid.
  • Payment commonly uses separate manager’s cheques: one to the seller’s bank for the debt, one to the seller for the balance, and one to DLD for the fee.
  • After the seller’s bank issues a clearance or release letter, Mortgage Release and sale registration are completed at the Trustee office.

Fees and key distinctions

  • DLD mortgage registration costs 0.25% of the loan amount, plus fixed fees that should be checked on the relevant service page at the transaction date.
  • Mortgage Release has a separate fixed DLD fee structure.
  • Valuation, bank processing or arrangement fees, life insurance and property insurance vary by bank; there is no single CBUAE percentage for them.
  • Early-settlement charges are commonly capped at 1% of the outstanding balance or AED 10,000, whichever is lower (market practice); the specific amount should be checked in the bank’s Key Facts Statement.
  • A bank NOC concerns mortgage release or transfer. A developer NOC confirms that there are no outstanding service charge debts. They are different documents.

Sample questions with explanations

Questions are paraphrased in the style of the exam; they are not official DLD questions.

1. In a mortgage deal, which party receives the loan from the financing institution?

  1. The person obtaining the loan
  2. The financing arrangement itself
  3. The party providing the loan
  4. The owner of the property
Show answer and explanation

Answer: A) The person obtaining the loan. The borrower is the person who receives and must repay the mortgage finance. The lender is the bank or other financing institution.

2. Under the DLD mortgage-registration e-service, what service partner charge applies to a mortgage registered against a provisional Oqood property?

  1. AED 5,000 plus VAT
  2. AED 300 plus VAT
  3. AED 4,000 plus VAT
  4. AED 2,000 plus VAT
Show answer and explanation

Answer: A) AED 5,000 plus VAT. For a provisional property recorded through Oqood, the stated service partner fee is AED 5,000 plus VAT.

3. Which factors determine the overall amount of property finance available?

  1. All of these factors
  2. The number of months of finance
  3. The finance rate
  4. The property value
Show answer and explanation

Answer: A) All of these factors. The finance period, finance rate and property value can all affect the amount of property finance. Therefore, the combined answer is correct.

4. What processing time is stated for a DLD mortgage registration application through the e-service?

  1. 2 hours
  2. 5 minutes
  3. 3 working days
  4. 20–25 minutes
Show answer and explanation

Answer: D) 20–25 minutes. The stated service time for mortgage registration is 20–25 minutes.

5. Which party provides the money in a mortgage transaction?

  1. The property owner
  2. The loan provider
  3. The financing facility itself
  4. The person taking the loan
Show answer and explanation

Answer: B) The loan provider. The lender is the party that provides the finance, normally a bank. The borrower receives the loan and is responsible for repayment.

6. How many mortgage contracts, bank-certified and signed by both parties, must be filed at the Trustee office for mortgage registration?

  1. Three
  2. Two
  3. One
  4. Five
Show answer and explanation

Answer: A) Three. Three mortgage contracts certified by the mortgagee bank and signed by both parties must be submitted, together with the bank letter.

7. Unless the parties make a different agreement, who pays the expenses of the mortgage contract?

  1. The mortgagor
  2. The property seller
  3. The broker arranging the finance
  4. The mortgagee bank
Show answer and explanation

Answer: A) The mortgagor. Unless the parties agree otherwise, the mortgage contract costs are borne by the mortgagor, meaning the party granting the mortgage over the property.

8. Can a mortgagor transfer or otherwise dispose of mortgaged property without approval from the mortgagee bank?

  1. No; the mortgagee bank must consent
  2. Yes, but only as a gift
  3. Yes, if DLD gives approval
  4. Yes, if the buyer pays the bank within 30 days
Show answer and explanation

Answer: A) No; the mortgagee bank must consent. The mortgagor cannot dispose of the mortgaged property without the mortgagee’s consent. In practice, a bank NOC is distinct from a developer NOC.

9. If the mortgagor misses due payments, what is the stated consequence?

  1. DLD cancels registration and returns the property to the developer
  2. The bank automatically becomes owner after 90 days
  3. The property is attached and sold by public auction under a competent court decision
  4. The bank privately sells the property at market value
Show answer and explanation

Answer: C) The property is attached and sold by public auction under a competent court decision. The stated process is attachment of the property followed by a public auction under a decision of the competent court. It is not an automatic transfer of ownership to the bank.

10. What does the term mortgage portfolio mean?

  1. One property mortgaged to several banks
  2. One unit financed by several borrowers
  3. More than one property mortgaged under a single registration entry
  4. An off-plan mortgage involving a developer
Show answer and explanation

Answer: C) More than one property mortgaged under a single registration entry. A mortgage portfolio means that multiple properties are covered in one mortgage registration entry.

11. Besides the mortgaged property itself, what else is included in the mortgage coverage?

  1. Only the next year’s rental income
  2. Nothing other than the land plot
  3. Attachments such as buildings, plants and later improvements
  4. Only the owner’s movable furniture
Show answer and explanation

Answer: C) Attachments such as buildings, plants and later improvements. The mortgage extends to attachments to the property, including buildings, plants, fixed items and subsequent developments or improvements.

12. Before title deed and other charges, what is the DLD Mortgage Release fee for removing a mortgage?

  1. AED 300
  2. AED 250
  3. AED 1,000
  4. AED 4,000
Show answer and explanation

Answer: C) AED 1,000. The Mortgage Release fee is AED 1,000 before title deed and other applicable fees. AED 300 plus VAT is the service partner fee, while AED 250 relates to the title deed.

13. Which document is required at Registration Registrars offices when applying to remove a mortgage?

  1. A new property valuation certificate
  2. The developer’s NOC
  3. A Dubai Courts judgment in every case
  4. A bank letter requesting mortgage removal
Show answer and explanation

Answer: D) A bank letter requesting mortgage removal. Mortgage removal requires a letter from the bank confirming the mortgage removal. Emirates ID is used for identification.

14. For a mortgage transfer between banks at a Trustee office, which bank documents are needed?

  1. A no-objection letter from the previous bank and a new-bank letter to register the mortgage
  2. A court order and the seller’s power of attorney
  3. Only a new valuation certificate
  4. A new-bank letter and a developer NOC for ready property
Show answer and explanation

Answer: A) A no-objection letter from the previous bank and a new-bank letter to register the mortgage. The transfer requires an NOC from the previous bank and a letter from the new bank for mortgage registration. Three mortgage contracts are also required.

15. A mortgaged-property sale requires three manager’s cheques. Which allocation is correct?

  1. To the developer for debt, to the seller for deposit, and to RERA for 4% fees
  2. To the bank or developer for debt, to the seller for the balance, and to the Department for 4% fees
  3. To the bank for debt, to the broker for commission, and to the Department for 2% fees
  4. To the seller for the full price, to the bank for interest, and to the buyer for deposit
Show answer and explanation

Answer: B) To the bank or developer for debt, to the seller for the balance, and to the Department for 4% fees. In a mortgaged resale, separate manager’s cheques are commonly issued for the outstanding debt, the seller’s remaining proceeds and the DLD fee. This supports mortgage settlement and sale registration at the Trustee office.

Common mortgage exam traps

  • Confusing the borrower with the lender: the borrower receives the finance, while the lender provides it.
  • Using first-home LTV limits for a second or subsequent property, where the limits are 65% for UAE nationals and 60% for expatriate residents.
  • Assuming every non-resident has the same LTV: the CBUAE does not set a separate non-resident ceiling, so the bank’s own terms must be checked.
  • Confusing a bank NOC for mortgage release or transfer with a developer NOC concerning service charge debts.
  • Forgetting that, if valuation is below the sale price, the bank calculates finance from the lower valuation and the buyer funds the shortfall.
  • Assuming off-plan mortgage finance is impossible: it is regulated at up to 50% LTV.

Practise “Mortgages” in the free exam trainer · Take a mock exam: 30 questions, 60 minutes

FAQ

What is the maximum mortgage term in the UAE?

The maximum mortgage term is 25 years. The regulatory age limit at the final payment was removed in 2019, while each bank applies its own risk policy.

What is the DBR limit for a UAE mortgage?

Debt Burden Ratio is limited to 50% of the borrower’s gross income across all credit obligations. Banks must also apply stress testing.

What happens if a Dubai property valuation is lower than the agreed purchase price?

The bank calculates the mortgage from the lower valuation. The buyer must provide the difference between available finance and the agreed price.

What is the DLD fee for mortgage registration?

DLD mortgage registration is 0.25% of the loan amount, plus fixed fees. The precise fixed charges should be checked at the transaction date.

How is a seller’s existing mortgage cleared during a resale?

The seller obtains a Liability Letter from the bank, the debt is settled through the transaction, and the bank issues a clearance or release letter. Mortgage Release and sale registration are then completed at the Trustee office.

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