EIBOR
EIBOR is the Emirates Interbank Offered Rate, the benchmark interest rate published daily by the UAE Central Bank, to which variable mortgage rates are linked.
What EIBOR means for a buyer
The Emirates Interbank Offered Rate (EIBOR) is the rate at which UAE banks indicate they would lend dirhams to one another. The Central Bank of the UAE publishes it each business day, calculated from the submissions of a panel of banks, for a range of periods from overnight to one year.
It matters to property buyers because it underlies mortgage pricing. A typical UAE home loan has a fixed rate for an initial period of one to five years, after which it reverts to a variable rate expressed as a bank margin plus EIBOR, usually the one-, three- or six-month rate. If your margin is 1.5% and three-month EIBOR is 4%, you pay 5.5% until the next reset. Those figures are for illustration only; check the current rate on the Central Bank's website.
Because the dirham is pegged to the US dollar, EIBOR follows US interest rates closely. A UK borrower should not expect UAE mortgage rates to move with the Bank of England.
What to check in a mortgage offer:
- which EIBOR period applies and how often the rate resets
- the margin, which is normally fixed for the life of the loan and is the part you can compare between banks
- any minimum rate, or floor, below which your rate will not fall whatever EIBOR does
- the cost of leaving: Central Bank rules cap early settlement fees at 1% of the outstanding balance, to a maximum of AED 10,000
See LTV and pre-approval for the rest of the lending picture.
Related terms
Guides that use this term
Where EIBOR comes up in practice, with the costs, rules and steps around it.
Questions about the buying process?
An adviser can explain how this applies to the property you're considering.
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