If your fixed rate mortgage is ending in the UAE in the next year, the number on your statement is about to change, and probably not in your favour. A UAE fixed rate is almost never fixed for the life of the loan. It is an introductory rate, typically for one to five years, after which the loan moves to a variable rate built from the Emirates Interbank Offered Rate (EIBOR) plus a margin written into your contract. The Central Bank of the UAE (CBUAE) raised its Base Rate to 3.90% on 17 September 2026, and EIBOR sits above it, so anyone who locked in during the cheaper period before the hike is heading for a bigger reset than the original sales illustration may have suggested.
This guide is written from a mortgage-broker perspective. It explains what happens at roll-off, anchors a worked example to real September 2026 benchmark levels, lays out your five options, gives a month-by-month action timeline, and lists the contract terms to read before you decide anything.
Published: 2 October 2026
What happens when a UAE fixed-rate mortgage ends?
When the fixed period ends, your loan automatically moves to a variable rate, usually EIBOR plus the bank’s margin. You do not have to do anything for this to happen, which is exactly why it catches people out. The margin is fixed in your contract at the start; EIBOR is the part that moves. One comparison site that tracks UAE lenders (mortgagecompare.ae, page last updated 24 September 2026) reports reversion margins of roughly 1.00% to 2.25% over EIBOR, with most lenders between about 1.50% and 1.99%, and notes that the margin you accept at the beginning stays with you for the whole loan.
Three details in your documents decide how large the jump is:
- Which EIBOR tenor you are linked to. Some loans reset off 1-month EIBOR, others 3-month, and the tenors are not the same number. On the CBUAE fixings for 3 September 2026, 1-month was 3.81%, 3-month 4.00%, 6-month 4.11% and 12-month 4.34%.
- The margin. This is the biggest long-run cost, because most borrowers spend far more of the loan in the variable phase than in the fixed one.
- How often it resets and whether there is a floor. Some products reset monthly, others quarterly. Whether a minimum rate (a floor) applies is a bank-specific term. We could not verify a market-wide standard, so treat it as a question to put to your bank in writing rather than something to assume either way.
For the basics of how the benchmark is set, see our explainer on EIBOR and how UAE mortgage rates are set.
Why the 2026 rate hike makes this reset bigger
The reset is bigger because benchmark rates are higher than when most current fixed deals were priced. The CBUAE raised its Base Rate by 25 basis points, from 3.65% to 3.90%, effective 17 September 2026, in step with the US Federal Reserve. EIBOR moved up too. Published 3-month figures differ by source and date: 4.00% on 3 September, about 4.20% on the 24 September fixing, and about 4.34% on 29 September (Trading Economics). A CBUAE-linked fixing page we checked on 1 October 2026 showed about 4.39% for a 5 October value date. Because trackers quote different dates and tenors, always check the current CBUAE fixing, or your bank’s own page, for the day your loan actually resets.
Now compare that with fixed rates on offer. In July 2026 Khaleej Times reported fixed-rate products at around 3.75% for one year, 3.78% for two years and 3.95% for three years. Those are introductory rates, and most UAE banks price their best fixed deals for salary-transfer customers (see our salary transfer guide). A borrower coming off a fixed deal in that range and moving to EIBOR plus a margin of 1.5% to 2% is looking at a rate in the region of 5.5% to 6.5% at current benchmark levels. That is a large step up.
Our post on what the September 2026 base rate hike means for your mortgage explains why fixed-period borrowers see no immediate change. This guide covers the moment that protection runs out.
Worked example: what roll-off costs on a real 2026 benchmark
This is an illustration, not a quote. It uses real benchmark levels with an assumed loan and an assumed margin so you can see the mechanics. Your own contract will differ.
- Loan: AED 1,600,000 over 25 years
- Fixed rate for the first 3 years: 3.95% (the three-year fixed level Khaleej Times reported in July 2026)
- Benchmark at roll-off: 3-month EIBOR of about 4.34% (Trading Economics, 29 September 2026)
- Assumed margin: 1.75%, inside the 1.00% to 2.25% range above
- Reversion rate: 4.34% + 1.75% = 6.09%
On those assumptions the monthly payment during the fixed period is about AED 8,401, and the outstanding balance after 36 months is about AED 1,480,400. The table shows what the same balance costs over the remaining 22 years under different EIBOR outcomes, keeping the 1.75% margin.
| Scenario (balance AED 1,480,400, 22 years left) | 3M EIBOR assumed | Rate (EIBOR + 1.75%) | Approx. monthly payment |
|---|---|---|---|
| During the fixed period (for reference) | n/a | 3.95% | AED 8,401 |
| EIBOR eases from today’s level | 3.50% | 5.25% | AED 9,467 |
| EIBOR stays at late-September 2026 level | 4.34% | 6.09% | AED 10,191 |
| EIBOR rises another 0.66 points | 5.00% | 6.75% | AED 10,779 |
At today’s EIBOR, the payment rises by about AED 1,790 a month, roughly 21%. Even if EIBOR eases to 3.50%, the payment is still about AED 1,066 a month above the fixed-period payment. Note that the fixed-period payment of AED 8,401 is calculated on the original loan; the higher figures are calculated on the smaller remaining balance but a higher rate. These payments are before any early settlement fee, overpayment or fee changes.
The first lesson is simple: budget for the revert rate, not the fixed rate, well before your fixed period ends. Our guide to how much you can borrow shows how repayment size affects your debt burden ratio if you later need to refinance.
When does the fixed period actually end, and how do you find out?
Your offer letter and loan agreement state the exact end date, the EIBOR tenor, the margin and the reset schedule. Banks generally send a reminder before the end of the fixed period, but the timing and content of that notice are not standardised, so do not rely on it. Find the original offer letter (our offer letter checklist lists the terms worth checking) and note these five items:
- The date the fixed period ends, counted from the first drawdown, which can differ from the date you signed.
- The reversion formula: EIBOR tenor plus margin.
- Whether a floor applies.
- How often the rate resets.
- What the bank says about early settlement, overpayment and switching during and after the fixed period.
If you cannot find the documents, ask your bank for a written statement of these terms. A bank statement or key facts statement (KFS) should show them.
Your five options at roll-off
You have five realistic options: stay on the variable rate, negotiate with your current bank, take a new fixed deal with the same bank, refinance to another bank, or reduce the balance with overpayments. None is automatically best. The right choice depends on your remaining balance, your remaining tenure, how long you plan to keep the property, and how your income looks to a lender today.
Option 1: Stay on the variable rate
This is the default. It makes sense if the margin is already competitive, if you expect EIBOR to ease, or if the saving from moving would not cover the costs. Your payment will track EIBOR, so keep a buffer for increases. Our fixed vs variable guide covers the trade-off in more detail.
Option 2: Negotiate with your current bank
Ask your bank for a lower margin, or for the rate it would offer a new customer. Banks sometimes price retention offers, but only the lender can approve a pricing exception and there is no guarantee. Ask early and in writing, and ask for any change to be documented as an amendment to your contract rather than a verbal assurance.
Option 3: Take a new fixed period with the same bank
Some banks will let existing borrowers move onto a new fixed product when the old one ends. Compare the new fixed rate with what you would pay variable, and ask what happens when that second fixed period ends. A second fixed deal only postpones the reset, and a rising-rate environment is exactly when postponing has value, but you should know the terms before you sign.
Option 4: Refinance to another bank
Moving the loan to another lender can reduce the margin or lock a new fixed rate. It also means a new application, a new valuation, and a fresh check of your income and debts against current rules. In 2026 many banks have tightened income scrutiny, as covered in our post on why UAE banks are tightening lending, so do not assume you will be approved on the same terms as before. Read our full guide to mortgage refinancing in the UAE and compare lenders using our bank comparison.
Option 5: Overpay to shrink the balance
If you have spare cash, partial prepayments reduce the balance that attracts the higher rate. Many banks allow a free annual overpayment allowance, with amounts above it charged at the capped early settlement rate. Allowances differ by bank, so confirm yours. Our early settlement guide lists verified examples.
What does it cost to switch? Run the break-even
The cost of leaving is the early settlement fee plus the new bank’s charges, and your saving must exceed it over the time you will keep the loan. The CBUAE caps the early settlement fee on variable-rate products at 1% of the outstanding balance or AED 10,000, whichever is lower. On a balance of AED 1,480,400, 1% would be about AED 14,804, so the AED 10,000 limit applies.
Two cautions. First, the sources we checked state this cap for variable-rate products. After roll-off your loan is variable, which suggests the cap applies, but that is an inference, so confirm it with your bank in writing. If you exit before the fixed period ends, some fixed products carry additional break costs, so check your offer letter. Second, the new bank’s processing, valuation and registration charges are separate and vary, and we have not verified a standard figure, so ask for a full fee schedule before you compare.
Using only the AED 10,000 settlement cap and the example above (a 6.09% revert rate on AED 1,480,400 over 22 years):
- Switching to a rate 0.5 points lower (5.59%) cuts the payment from about AED 10,191 to AED 9,757, a saving of roughly AED 434 a month. It takes about 23 months to recover AED 10,000.
- Switching to a rate 1.0 point lower (5.09%) cuts the payment to about AED 9,332, a saving of roughly AED 859 a month. It takes about 12 months to recover AED 10,000.
Add the new bank’s fees and the break-even moves later. If you may sell within a couple of years, a small rate saving will often not justify the switch. If you plan to hold for a decade, even a modest margin cut can be worth real money. If your sources of comparison are brokers, remember that some brokers earn a commission when you move, so get a quote directly from your own bank as well. Our post on how brokers get paid explains how to ask.
A six-month action timeline
Start six months before your fixed period ends. That gives time for a refinance application, which can take weeks, while keeping your negotiating position strong.
- Six months out: gather documents. Find your offer letter and loan agreement. Note the end date, EIBOR tenor, margin, floor and reset schedule. Request a current outstanding balance statement.
- Five months out: check your own profile. Review your salary, employment status, other debts and credit report. Our guide to improving your credit score for mortgage approval helps if anything needs fixing first.
- Four months out: ask your current bank. Request in writing the revert rate, any retention or new-fixed offer, and the early settlement terms.
- Three months out: get competing quotes. Ask other banks for written indicative offers, including fees, and ask a mortgage consultant to compare. Remember that lender rates change after the 17 September hike, so quotes expire.
- Two months out: decide and apply. If switching, submit the application with enough time for valuation and settlement. If staying, confirm in writing any agreed change.
- One month out: confirm the settlement and the new payment. Make sure your standing instruction and your cash buffer match the new payment.
Mistakes we see at roll-off
- Assuming the bank will call you. Notice practices vary. Track the date yourself.
- Comparing headline rates only. The margin and fees matter as much as the introductory rate, because the margin stays for the life of the loan.
- Leaving it until the last month. A refinance needs time. Starting late forces you onto whatever the default rate is.
- Ignoring the new valuation. A switch needs a fresh valuation, which can come in lower than you expect. Our post on bank valuation lower than purchase price explains your options.
- Forgetting your own circumstances changed. If your job or income changed since you took the loan, a new lender will see that. The bank you already have has seen your payment history.
Frequently asked questions
What happens when my fixed rate mortgage ends in the UAE?
Your loan moves to a variable rate, normally EIBOR plus a margin set in your contract. The change happens automatically at the end of the fixed period unless you arrange something else with your bank.
How much will my payment go up after the fixed period?
It depends on your balance, remaining tenure, EIBOR tenor and margin. In our example, a AED 1.6 million loan reverting at 3-month EIBOR of about 4.34% plus a 1.75% margin rises from about AED 8,401 to about AED 10,191 a month. Your own figure will differ, so ask your bank for a written illustration.
Is the margin negotiable?
Sometimes. Banks may offer existing borrowers a retention rate or a lower margin, but only the lender can approve it and it is not guaranteed. Get any agreement in writing.
Can I switch banks when my fixed period ends?
Yes, but you must requalify with the new bank and pay the settlement and switching costs. Early settlement fees are capped by the CBUAE at 1% of the outstanding balance or AED 10,000, whichever is lower, for variable-rate products. Confirm how your bank applies this after roll-off.
Is there a floor on my variable rate?
Some products have one and some do not. We could not verify a market-wide standard, so check your loan agreement or ask the bank in writing.
Should I lock in another fixed rate or stay variable?
A new fixed period gives payment certainty, which is useful when rates have just risen, but it only delays the next reset and its terms differ. Compare the rate, the length, the fees and what happens at the end. See our fixed vs variable guide.
When should I start planning?
About six months before the fixed period ends, so you have time to compare offers and complete a refinance if you choose one.
Which EIBOR rate will my mortgage use?
It depends on your contract. Some use 1-month EIBOR and others 3-month. On 3 September 2026 the CBUAE fixings were 3.81% for 1-month and 4.00% for 3-month, so the tenor matters. Check your offer letter.
Does the September 2026 base rate hike change my current fixed rate?
No. During the fixed period your rate does not change. The hike matters at the reset, because the benchmark your new rate is built on is higher.
Can I make extra payments to reduce the impact?
Yes. Many banks allow a free annual overpayment allowance, and extra payments reduce the balance subject to the higher rate. Allowances differ, so confirm yours before paying. Amounts above the allowance may attract the capped early settlement fee.
Talk to Al Ghaf about your roll-off
Al Ghaf Mortgage offers two services: Mortgage Consulting and Banking Consultation. If your fixed period is ending, we can help you read your loan terms, estimate your revert payment, and understand how lenders are likely to view your income if you decide to switch, so you can decide before the default rate applies. Use our Contact Us page or message us directly on WhatsApp.
Message Al Ghaf on WhatsApp: +971 50 127 6925
This article is general information, not financial advice. Rates, margins, fees and bank policies change; the worked example uses assumed loan terms. Confirm your own terms with your lender or a mortgage consultant before you decide.
If you are weighing whether to refinance or sell when your fixed rate ends, this look at what Dubai’s 2026 price and transaction data actually show gives useful context on where property values stand.