(MENAFN) Emirati banks are gathering to make a proposal for the UAE Central Bank to lift mortgage loans cap to 75 percent of the property value for expats and 80 percent for UAE nationals, Arabian Business reported.
This was announced by Emirates Banks Association (EBA) chairman Abdul Aziz Al Ghurair who added that lenders would also recommend that second mortgages be capped at 60 percent for expats and 65 percent for nationals.
The move comes in response to a UAE Central Bank decision on December 30 to cap mortgage loan-to-value ratios in a bid to prevent overheating the property market and to reduce loan defaults.
Properties yet to be completed would attract a 50 percent cap in a move designed to minimize 'flipping'-the rapid on sale of off-the-plan properties.
Al Ghurair also said that the EBA is also considering limiting the total value of an individual mortgage to USD6.8 million, adding that it would impact only 2 percent of the total mortgage market.
The EBA will also ask the central bank to step up the establishment of a credit bureau, where every mortgage would be registered.
Al Ghurair commented that the changes were in the interests of protecting borrowers rather than banks.
Al Ghurair expected another round of negotiations with the Central Bank before it made a final decision, which would likely be introduced in the second half of the year.
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