New mortgage regulations target property speculation

The Central Bank of UAE has issued a new set of regulations on mortgage lending, defining the loan eligibility of various categories of borrowers based on the loan-to-value ratio (LTV).

The new regulations target to reduce the level of leverage and increase equity in property investments. The notification will be published in the UAE?s official gazette and will come to effect one month from the date of publication, the UAE Central Bank said in a circular issued to all banks and financial institutions operating in the country.

?In introducing these regulations, the central bank wishes to ensure that banks, finance companies and other financial institutions providing mortgage loans to UAE nationals, GCC nationals and expatriates do so in accordance with best practices,? Khalifa Mohammad Al Kindi, chairman of the board of the Central Bank of UAE, said.

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