For anyone using bank finance to buy a home or investment property, the valuation is a mandatory step that can change how much the bank will actually lend and how much cash you must provide. EGSH supports buyers by aligning the bank’s requirements with Dubai Land Department (DLD) procedures and related government procedures, ensuring the overall transaction runs smoothly and on time.
Why Bank Mortgage Valuation Matters
When you apply for a mortgage, the bank cannot rely only on the agreed purchase price. It must also know the property's objective market value that will secure the loan. This is where a formal property valuation in Dubai banks comes in: an independent expert assesses the unit and recent comparable sales to estimate the current market value.
Most banks in Dubai charge a specific fee for this step, typically around AED 2,500 for standard residential units, set by the bank rather than any government authority. This article explains how the Dubai property valuation process and Central Bank mortgage rules interact, where this AED 2,500 typically fits among other costs, and how EGSH can help you manage the government-related parts of the journey.
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What Is a Property Valuation for a Bank Mortgage?
A bank mortgage valuation in Dubai is an assessment of the property's current market value, carried out for the bank’s benefit. The value stated in the report becomes the reference figure for calculating the secured loan, not necessarily the figure in your sale and purchase agreement.
Purpose and Regulatory Context
Under Central Bank mortgage rules, UAE banks must lend responsibly and keep their loan-to-value (LTV) ratios within prescribed caps. To do this, they need an objective basis for the collateral value, which is provided by an independent valuation rather than by the seller’s asking price. The valuation helps confirm that the agreed price is broadly in line with market realities and that the property provides adequate security for the requested mortgage.
The report also assists the bank in assessing risk, especially for higher LTV loans or non-resident borrowers, where the Central Bank’s maximum LTV ratios are generally tighter. It forms part of the overall credit file, alongside your income documentation, credit score and property due diligence carried out through DLD systems.
Key Elements of the Valuation
For both apartment valuation for mortgage and villa valuation for mortgage, the valuer usually conducts an internal and external inspection. They assess built-up area, layout efficiency, quality of finishes, age and maintenance of the building, visible defects and any upgrades that could influence value. In villas, land size, landscaping and external structures are also relevant.
Location and micro-features are recorded in detail: floor level, view, balcony or terrace space, parking allocation, orientation, community amenities and whether the unit is vacant or rented. The valuer then uses a comparable sales approach, analysing recent transactions of similar properties in the same building or community, to derive an evidence-based market value presented in a structured mortgage valuation report that UAE banks can rely on.
Who Conducts the Valuation and How the Process Works
Banks normally appoint an independent, Dubai-based property valuer rather than using in-house staff to avoid conflicts of interest and to comply with professional standards. The borrower deals primarily with the bank, which, in turn, instructs a valuation firm from its approved list.
Independent Valuers on the Bank’s Panel
The valuation is usually undertaken by a property valuation company on the Dubai banks' approved panel. These firms are typically licensed surveyors, often recognised by DLD or RERA, and must comply with both local regulations and international valuation standards. They operate independently from the bank’s credit team, even though the bank pays them and receives the report.
The report is normally addressed specifically to the commissioning bank and is therefore not freely transferable. If you decide to switch lenders mid-process, the new bank may insist on commissioning its own valuation, meaning you could pay a second set of bank valuation charges, as Dubai banks apply under their own tariffs.
Step-by-Step Valuation Process
The Dubai mortgage valuation process usually follows a consistent sequence across banks:
- The bank issues an instruction to a valuer after you submit your mortgage application and pay the valuation fee.
- The valuer contacts the buyer, broker or seller to arrange access and schedules an inspection.
- A site visit is carried out, photographs are taken, and measurements and property details are checked against title or Oqood records.
- The valuer analyses comparable transactions from recent DLD data and prepares the report with a concluded market value.
- The report is sent directly to the bank, which then applies its internal LTV policy.
For higher-value, unique or multiple-unit assets, the analysis can be more detailed, sometimes including rental income assessments and additional market data, and the timeline or fee may increase accordingly.
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How Much Does a Mortgage Valuation Cost? Focus on the AED 2,500 Fee
The mortgage valuation fee Dubai buyers see on bank schedules is separate from all government fees and is set by each bank in coordination with its panel valuers. It is part of the overall mortgage processing costs, not part of the DLD transfer or registration charges.
Typical Fees for Standard Residential Properties
For many banks, the cost of property valuation of AED 2,500 (excluding VAT) is a common benchmark for standard apartments or mid-range villas. Publicly available fee schedules show that some lenders charge slightly more or less, often within a band of roughly AED 2,000–AED 3,000, depending on property type and their arrangements with valuers. These figures are indicative only, and you should confirm the exact fee with your chosen bank at the time of application.
For large villas, multiple units, or very unusual properties, a higher fee may be quoted because inspections and analysis are more complex. Occasionally, banks run promotional offers where they partially or fully waive valuation fees, but outside such campaigns, the borrower usually bears the full charge.
Who Pays the Fee and Is It Refundable?
The valuation fee is nearly always paid upfront by the buyer as part of the mortgage application. In practice, it is commonly non-refundable, even if the loan is later declined or the transaction does not proceed, because the independent valuer has already provided a professional service. You should therefore confirm in writing with the bank whether the fee is refundable before authorising payment.
This fee is distinct from other cost items such as bank processing or arrangement fees, property transfer fees, Dubai Land Department charges (typically a percentage of the purchase price), the Dubai Land Department mortgage registration fee on the loan amount, and any broker commission. The table below gives an illustrative breakdown:
| Cost Item | Who Sets It | Typical Basis |
|---|---|---|
| Valuation fee (approx. AED 2,500) | Bank / valuer | Fixed amount per standard residential property |
| DLD transfer fee | DLD | Percentage of purchase price (per DLD schedule) |
| DLD mortgage registration fee | DLD | Percentage of registered loan amount |
| Bank processing / arrangement fee | Bank | Flat amount or % of loan (per bank tariff) |
| Broker / agency fee | Brokerage firm | Agreed % of purchase price or fixed fee |
Figures and structures are illustrative; always check current DLD schedules and bank tariffs.
How Valuation Affects Your Maximum Mortgage (Loan-to-Value)
The valuation directly affects your borrowing capacity, because banks apply their LTV ratios to a conservative value figure. Understanding this mechanism helps you anticipate cash requirements and negotiate more confidently.
Use of the Lower of Purchase Price and Valuation
Under common practice guided by Central Bank mortgage rules, UAE banks apply the loan-to-value (LTV) ratio to the lower of the agreed purchase price and the valuer’s market value. This protects both borrower and bank from over-financing. LTV caps differ by borrower profile (UAE nationals, expatriate residents, non-residents) and by whether the property is a first home or an additional investment, but in all cases, the principle of “lower of price or value” is applied.
For example, if a property is priced at AED 1,000,000 but the valuation is AED 950,000, the bank will treat AED 950,000 as the property value for LTV purposes. Even if your LTV entitlement is high, it will be calculated on this lower base, reducing the maximum loan and increasing the required cash down payment.
When the Valuation Is Lower Than the Agreed Price
If the valuation comes in below the contract price, several outcomes are possible: you can increase your cash contribution, negotiate a lower price with the seller, request a smaller loan, or walk away if your contract allows. The bank will not usually increase its LTV ratio solely to bridge a low valuation.
Discuss such scenarios with your lender or adviser before signing binding agreements, so you understand precisely how a lower valuation will be treated.
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Timelines, Validity and Re-valuation Requirements
Timing and validity of the valuation are bank policy matters, though they are influenced by broader market conditions and internal risk controls.
Turnaround Times
For a standard residential property, how long does a mortgage valuation typically take in Dubai? Most banks and their valuers aim for a turnaround of about 2–5 working days from the date of inspection to the issuance of the report. Delays can occur if access to the property is restricted, documents are incomplete, or the asset is complex, so buyers should build a buffer into their transaction timelines.
These time frames should align with key milestones, such as cheque dates in the sale agreement, mortgage approval validity, and DLD transfer appointments, to avoid last-minute rescheduling.
Validity of Valuation Reports
Each bank sets its own internal policy on how long a valuation remains valid, typically within a 30–90-day window. After this period, especially in volatile markets, the bank may request an updated valuation or a short-form review before proceeding. DLD does not set these validity rules; they are risk-management tools applied by the lender.
If your transaction is likely to be delayed, ask your bank in writing how long the report will remain valid and whether a revaluation fee could be charged if the timelines are extended.
Practical Tips to Prepare for a Smooth Valuation
Proper preparation reduces the risk of delays and helps ensure the valuer has full, accurate information to work with.
Preparing the Property and Documentation
Ensure the valuer can easily access all areas of the property, including balconies, terraces, parking spaces and any storage areas listed on the title. A clean, well-lit unit with all rooms open helps the inspection proceed quickly and allows the valuer to accurately confirm the condition. If tenants occupy the property, coordinate times so they are informed and available.
Have key documents ready: title deed or Oqood, latest service charge statement, approved floor plans, and invoices or permits for significant upgrades such as new kitchens or extensions. Provide accurate details on tenancy status, current rent, and lease expiry, where applicable, as these can influence both value and bank appetite, particularly for investment properties.
Managing Expectations and Communication With the Bank
Before paying the fee, ask the bank to confirm in writing the exact valuation amount, whether any promotions apply, expected turnaround time, and the report’s validity period. Clarify how the bank will proceed if the valuation is significantly below the purchase price, and whether a second opinion is possible in limited circumstances.
Also, distinguish clearly between bank charges and government fees. Questions about DLD transfer fees, mortgage registration and related government payments can be clarified against official DLD schedules, either directly or through a trusted services centre such as EGSH.
FAQ
How does property valuation for bank mortgages work in Dubai?
The bank instructs an independent valuer from its approved panel once you apply and pay the valuation fee. The valuer inspects the property, collects data on size, condition and features, analyses recent comparable sales from DLD records, and issues a report with an estimated market value addressed to the bank. The bank then applies its LTV policy to this value, or to the purchase price if lower, when determining your maximum loan amount.
Why do banks require a property valuation for a mortgage in Dubai?
Banks must comply with Central Bank regulations on responsible lending, which require them to assess the adequacy of collateral and keep loans within LTV limits. An independent valuation ensures the loan is based on market value rather than just the seller’s price, reducing the risk of over-lending and protecting both bank and borrower from inflated prices. It also standardises how different properties are assessed within the bank’s portfolio.
What is the typical property valuation fee for a mortgage in Dubai?
For standard residential apartments and villas, many banks charge around AED 2,500 plus VAT, based on their published fee schedules. Some lenders price slightly lower or higher, often between AED 2,000 and AED 3,000, and may adjust fees for large or complex properties requiring more detailed analysis. These are commercial charges set by banks and valuers, not by DLD or any other government body.
Is the AED 2,500 property valuation fee refundable?
In most cases, the AED 2,500 valuation fee is non-refundable, as it covers the work of an independent valuer once the inspection and report are completed. The fee is usually retained even if the mortgage is declined, the valuation is lower than expected, or you decide not to proceed with the purchase. You should always ask your bank to confirm its refund policy in writing before authorising payment.
Who pays the property valuation fee for a mortgage in Dubai?
The buyer or borrower normally pays the valuation fee as part of mortgage processing costs, separate from DLD transfer and registration fees. Banks typically require payment before instructing the valuer, and the fee is not usually added to the loan but is paid in cash or from your account. Sellers and brokers typically do not share this cost unless it is specifically negotiated in the sale agreement.
How long does a mortgage valuation take in Dubai?
For a typical residential unit, most banks quote 2–5 working days from the inspection date to receipt of the valuation report. Timing may be extended if access is difficult, documentation is missing, or the property is unusual and requires deeper analysis. Buyers should align this period with cheque dates, contract milestones and DLD appointment bookings to avoid unnecessary pressure on completion deadlines.
How long is a property valuation report valid for a mortgage in Dubai?
Banks generally treat valuation reports as valid for a limited period, typically 30–90 days, after which they may request an update or a full revaluation. The exact validity period is determined by each bank’s internal risk policy and market conditions, not by DLD. If your purchase is likely to be delayed, ask the bank how long the valuation will be honoured and whether additional fees may apply for extensions.
What happens if the bank valuation is lower than the purchase price in Dubai?
If the valuation is lower than the agreed price, the bank will base its LTV calculation on the lower valuation, reducing the maximum mortgage available. You may then need to increase your cash down payment, renegotiate the price with the seller, or reconsider the transaction if the gap is too large. Some buyers also explore alternative properties or lenders, but any new bank is likely to reach a similar value if the market evidence is consistent.
Reviewed by
Muneer Juma Al Balushi
Real Estate Registration Trustee Consultant
Muneer Juma Al Balushi has six years of experience in the real estate registration system of the Dubai Land Department. He specialises in accurate, secure, and legally compliant property registration.
This article is intended to provide general information based on official UAE sources, and does not constitute personalised legal advice. Before acting, applicants should verify the current rules and fees directly with the relevant authority or an authorised service centre.
