1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. It's used to pay off both interest and principal each month so that over time, the loan is paid off in full.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (AED)
• \( r \) — Monthly interest rate (annual rate divided by 12 and converted to decimal)
• \( n \) — Loan term in months
• \( PMT \) — Monthly EMI payment (AED)

Explanation: The formula calculates the fixed payment amount required each month to pay off a loan over its term, accounting for compound interest.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan offers, and determining affordability before taking a home loan in Dubai.

4. Using the Calculator

Tips: Enter principal amount in AED, annual interest rate in percentage, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical home loan interest rate in Dubai?
A: Interest rates vary but typically range between 2.5% to 5% for expats and 1.5% to 4% for UAE nationals, depending on market conditions.

Q2: What is the maximum home loan term in UAE?
A: Most banks offer terms up to 25 years, with some extending to 30 years for UAE nationals.

Q3: Are there additional costs beyond EMI?
A: Yes, consider processing fees (0.5-1% of loan), property valuation fees, insurance, and potential early settlement fees.

Q4: Can I prepay my home loan in Dubai?
A: Yes, but banks may charge 1-3% of the outstanding amount as early settlement fee, especially in the first few years.

Q5: What is the maximum loan-to-value (LTV) ratio in UAE?
A: For expats, typically 75-80% for first properties (lower for secondary properties). UAE nationals may get up to 85%.