Dubai Islamic mortgage lender Tamweel has ended its two year moratorium on new lending this week, after Dubai Islamic Bank (DIB) stepped in with a bailout, which increased its stake in Tamweel from about 21 per cent to 57.3 per cent.
While its rates are competitive they are not going to be the best, and the effect of their re-entry to the market is expected to be limited, not least because we don’t know as yet how strict the bank’s lending criteria will be.
“We are not sure if there are hidden qualification factors that will prevent many potential buyers from being able to secure a mortgage with Tamweel,” said James Gauduchon, the manager of corporate marketing at Better Homes, a property brokerage in Dubai.
Rates wise it seems that Tamweel are only just competitive when we look around the market. The bank’s is to charge 7.4 percent per year, plus between 0.5 and 1.5 percentage points based on customers’ income levels and other factors. On top of that the bank is to charging 1% processing fee on 25 year Islamic mortgages. Customers can borrow a maximum of Dh5 million (US$1.3m) to buy up to two properties.