When you start paying off your mortgage, you start to build equity in the property. For example, if you’ve bought a property worth AED 1.5m and have already paid off AED 500,000 that means you have built up AED 1,000,000 worth of equity in your property. This allows you to take either a top-up loan/equity release, which is additional borrowing on your existing loan that can be used for a variety of purposes.
Equity Release/Top-up/Additional Borrowing/Further Advance
After a mortgage has been fully disbursed, you can apply for additional borrowing at any time, subject to eligibility. You can use the built-up equity in your home to take out a loan to consolidate loans, or pay off unexpected expenses.
Loan-to-value refers to the percentage of the a property value that the lender is willing to lend you. This is governed by the UAE Central Banks regulations, with specific details below.