What is EIBOR? How the UAE benchmark rate moves your mortgage (2026)

EIBOR, the Emirates Interbank Offered Rate, is the benchmark for what it costs UAE banks to borrow dirhams from each other. It is published every business day by the Central Bank of the UAE, and it is the rate most UAE mortgages follow once their fixed period ends.

The Central Bank's EIBOR regulations define it as the daily reference rate at which panel banks are able and willing to access dirham funding, in reasonable market size, for a given period, from the UAE money market just before 11:00 local time. The Central Bank is the administrator: it chooses the panel, collects the data, oversees the calculation and publishes the result.

Why it matters to you: a bank's cost of money moves with EIBOR, so a loan priced as "EIBOR plus a margin" moves too. If you take a mortgage to pay the handover balance on an off-plan home, EIBOR will shape most of what you pay over the life of the loan.

This guide explains how EIBOR is set, what moves it and what a change does to a repayment. Eligibility, loan caps and fees for off-plan buyers are covered in our guide to off-plan mortgages in the UAE. This is general information, not financial advice.

Every business day, a panel of banks submits the rate at which it could borrow dirhams for each period. The highest and lowest submissions are removed, the rest are averaged, and the result is published at noon.

The method is set out in the Central Bank's 2018 EIBOR regulations:

• The panel. Eight to fourteen banks operating in the UAE, nominated by the Central Bank, which reviews each bank's eligibility every year.
• The data. Banks base submissions first on real interbank transactions. Where there are none, they follow a set order of fallbacks, ending in documented expert judgement.
• The trim. The top and bottom quartile are excluded. With 11 to 14 submissions, the three highest and three lowest are dropped; with 8 to 10, two of each; with 5 to 7, one of each. With four or fewer, there is no fixing that day.
• The average. The remaining rates are averaged and published to five decimal places.
• Publication. Fixings are published at 12:00 UAE time each business day and appear on the Central Bank's website, with their history since the Central Bank took over the fixings in October 2009.

EIBOR is fixed for six periods, called tenors. Variable mortgages are usually priced off three-month EIBOR, and reset every three months.

Longer tenors carry more uncertainty, so they usually price in what the market expects the Central Bank to do over that period. That is why three-month EIBOR can start moving before the Base Rate changes.

Your loan documents name the tenor, the margin and the reset dates. If they are not clear, ask the bank to state them in writing before you accept the offer.

The Base Rate is the Central Bank's policy rate. It is anchored to the US Federal Reserve because the dirham is pegged to the dollar, and it sets the floor that EIBOR moves around.

The peg. The dirham has been fixed at AED 3.6725 to the US dollar since 1997. To keep it stable, UAE interest rates have to follow US rates, otherwise money would flow towards whichever currency paid more.

The Base Rate. The Central Bank describes its Base Rate as anchored to the Federal Reserve's interest rate on reserve balances. It signals the stance of monetary policy and provides an effective floor for overnight money market rates. Banks that borrow short-term liquidity from the Central Bank pay 0.50 points above it, which has meant 4.40% since 17 September 2026.

The link to EIBOR. The Base Rate sets the cost of the shortest money. EIBOR, built from what banks pay each other for up to a year, sits around it and moves when expectations about the next Fed and Central Bank decisions change.

Recent Base Rate decisions

A Base Rate change does not alter your mortgage on the day. It reaches you through EIBOR, at your loan's next reset, and only if you are past any fixed period.

A variable UAE mortgage rate is EIBOR plus a margin. The margin is fixed by the bank for the life of the loan; EIBOR is what changes.

Most home loans fall into one of three types:

The margin. It reflects the bank's view of the loan: your income and employer, the loan-to-value, whether you are resident, and the property. A lower margin matters more than a low introductory rate if you keep the loan for many years.

The minimum rate. Some loans set a floor, so you do not benefit if EIBOR falls below a certain level. Ask whether your loan has one, and at what level.

Islamic home finance. Ijara and murabaha products charge a profit rate rather than interest, but the rental or profit element is commonly benchmarked to EIBOR in the same way. The Central Bank's mortgage regulations apply the same loan caps and debt limits to Islamic finance.

On a large loan, small rate changes add up. These figures use a standard repayment mortgage of AED 1,600,000 over 25 years, the loan on an AED 2,000,000 home bought with 20% down.

At these levels each quarter-point moves the payment by roughly AED 220 to AED 245 a month. A one-point rise, from 4.00% to 5.00%, adds about AED 908 a month, or roughly AED 10,900 a year.

When a fixed rate ends

Say the same loan is fixed at 4.00% for three years, and then reverts to three-month EIBOR plus a margin of 1.25%. After three years of payments of AED 8,445, the balance is about AED 1,481,177, with 22 years to run.

The point of the example is the jump at reversion. A low fixed rate can make a loan look cheaper than it is, so ask the bank to show you the payment at the end of the fix, using today's EIBOR and its margin.

Off-plan buyers usually borrow at handover, often two to four years after booking. The rate you see today is not the rate you will get, so plan for a range.

The loan starts late. The Central Bank caps mortgages on property bought off-plan at 50% of value, and banks generally lend late in construction or at handover. That leaves years between the day you commit and the day your rate is set. Our off-plan mortgage guide explains why.

Pre-approval does not lock the rate. An approval in principle is typically valid for 60 to 90 days. At handover the bank re-assesses your income, the valuation and the rate on that day.

Affordability moves with the rate. The Central Bank limits total debt repayments to 50% of income. A higher rate raises the repayment, which lowers how much you can borrow on the same salary. On the AED 1,600,000 example, the repayment at 5.15% is AED 9,387 a month, which on its own would need a monthly income of at least AED 18,774 to stay within that limit.

Stress-test it yourself. Banks commonly test applicants at two to four points above the loan rate. Do the same before you choose a plan: work out the handover payment you would owe at today's rate plus one and plus two points.

Compare it with a post-handover plan. A developer post-handover plan is usually interest-free credit, so it is not touched by EIBOR at all. Its instalments are shorter and larger than mortgage repayments, but if your income can carry them, the plan can cost less than borrowing. Projects that offer one are listed under post-handover payment plans, and our payment plan guide compares structures.

Watch the cash, not just the rate. Since 1 February 2025 banks have not financed the 4% DLD fee, and mortgage registration adds 0.25% of the loan. Our guide to the DLD fee has worked examples of both.

Neither is right for everyone. A fixed rate buys certainty for a period; a variable rate gives you any fall in EIBOR, and every rise.

Questions that settle the choice:

1. How long do you expect to keep the loan or the property?
2. Could you meet the payment if the rate rose two points at the end of the fix?
3. What is the margin after the fix, and is there a minimum rate?
4. What would it cost to repay early or move to another bank?

Yes, but count the cost. Repaying early can carry a fee, and moving the loan to another bank means registering the change with the Dubai Land Department.

Early settlement. The Central Bank set a limit in 2019 on the fee banks may charge to settle a mortgage early: 1% of the outstanding balance or AED 10,000, whichever is lower. Check the figure in your own key facts statement.

Moving banks. A buyout by another bank usually means discharging the old mortgage and registering the new one. In Dubai, discharging a mortgage is AED 1,000 and transferring a mortgage is 0.25% of its value under the Land Department's fee schedule, and new mortgage registration is 0.25% of the loan plus fixed and service partner fees. Add the new bank's valuation and arrangement fees.

Switching makes sense when the saving over the years you expect to hold the loan is clearly larger than those costs. Run the numbers with the new bank's margin, not just its introductory rate.

The Central Bank of the UAE publishes the day's EIBOR fixings on its website after noon on each business day, for all six tenors, with history back to October 2009. Many UAE banks also publish them.

To estimate your own next payment:

1. Find your loan's tenor and margin in your offer letter or key facts statement.
2. Note the reset date; your rate will use EIBOR on or near that date.
3. Add the margin to the current EIBOR for that tenor.
4. Check the result against any minimum rate in your loan.
5. Recalculate the payment on your remaining balance and term, or ask the bank to.

EIBOR is published to five decimal places, but your loan uses the rate the bank applies on its reset date, so small differences are normal.

1. Is the rate fixed, variable or fixed then variable? For how long is it fixed?
2. Which EIBOR tenor is used, and how often does the rate reset?
3. What is the margin, and does it ever change?
4. Is there a minimum rate, and at what level?
5. What will my payment be when the fixed period ends, at today's EIBOR?
6. What is the early settlement fee, and are part-payments allowed without a fee?
7. For an off-plan home, how long is the approval valid, and what happens if rates change before handover?

• EIBOR. Emirates Interbank Offered Rate, the daily benchmark for dirham borrowing between banks.
• Tenor. The period an EIBOR rate covers, from overnight to twelve months.
• Base Rate. The Central Bank of the UAE's policy rate on its overnight deposit facility, anchored to the US Federal Reserve.
• IORB. The Federal Reserve's interest rate on reserve balances, the US rate the Base Rate follows.
• Margin. The fixed amount a bank adds to EIBOR to set a variable rate.
• Reversion rate. The rate a loan moves to when its fixed period ends.
• Minimum rate. A floor below which a variable rate does not fall.
• Debt burden ratio. Total monthly debt repayments as a share of income, capped at 50% by the Central Bank.

If you are buying off-plan and plan to borrow at handover, start with our off-plan mortgage guide for the loan caps and timing, then the true cost guide for the full cash plan. To compare homes whose handover suits your finances, see projects near handover or browse by year, such as handover in 2027.