Mortgage Finder has commended the UAE Central Bank's announcement stating that banks can no longer charge a 3% early settlement fee for borrowers who want to exit their mortgage early.
Going forward, banks can only charge borrowers a 1% early settlement fee on an outstanding mortgage amount, Mortgage Finder said in a statement.
The Central Bank said that in the future, banks may only charge borrowers a 1% early settlement fee on the outstanding mortgage amount or $2,722 (AED10,000), whichever is less.
The update from the Central Bank is also said to have indicated that anyone who has been made to pay the 3% settlement fee is eligible for a refund from their bank within 30 days.
Managing director of the Property Finder-backed firm, Chris Schutrups, said: “The news from the Central Bank is positive as it now opens up opportunities for those borrowers who were paying a higher rate of interest on their mortgage to find a better deal and save money.
“The recent interest rate cuts that we have seen are pushing banks to be more competitive with their products. We have seen a decrease in mortgage rates since the beginning of the year.
"All of this is great news for those borrowers who were stuck with mortgage products that did not reflect the changing market.”