What changed in the UAE?

On 16 September 2026, the Central Bank of the UAE raised the Base Rate applicable to the Overnight Deposit Facility by 25 basis points, from 3.65% to 3.90%, effective 17 September. The central bank kept the rate for borrowing short-term liquidity from it at 50 basis points above the Base Rate.

The decision followed the US Federal Reserve’s 25-basis-point increase in its target range. The UAE Base Rate is linked to the Fed’s interest rate on reserve balances, so the move is part of the UAE’s monetary-policy transmission rather than a Dubai-property-specific decision.

• The UAE Base Rate rose by 25 basis points.
• The new Base Rate is 3.90% from 17 September 2026.
• The decision followed the US Federal Reserve’s move.

What mortgage buyers should check now

A rate decision does not mean every mortgage payment changes by the same amount or on the same day. The effect depends on the loan contract: whether the rate is fixed or variable, the benchmark used, the lender’s margin and the next reset date.

Buyers using finance should compare the full borrowing scenario before making an offer. Our guide to choosing between cash purchase and mortgage explains why the down payment alone is not enough: affordability should include the payment after any applicable reset, fees and a realistic liquidity reserve.

• Check whether the loan is fixed or variable.
• Review the benchmark, margin and reset date.
• Test affordability beyond the initial down payment.

How the move may affect Dubai real estate

The most direct channel is borrowing cost and buyer affordability, particularly for ready properties purchased with mortgages. It can influence the size of a buyer’s loan, monthly commitment and willingness to negotiate, but it does not automatically determine the value of every property.

Cash buyers are not exposed to mortgage repricing in the same way, yet they should still judge each purchase on evidence. Use Dubai transaction data to compare recent completed sales, then adjust for location, building, condition and the specific property rather than reacting only to an interest-rate headline.

• Mortgage affordability is the most direct channel.
• Ready-property buyers may feel the change first.
• Transaction evidence matters more than headlines alone.

What buyers and sellers should do next

Mortgage buyers should ask their lender or broker how the contract handles the new rate, when any change could apply and what payment range remains comfortable. Cash buyers should keep evaluating price, liquidity and the purpose of the purchase with the same discipline.

For sellers, a higher-rate environment makes accurate positioning more important. Review comparable completed sales and use a realistic pricing process such as the one in How to Check If a Dubai Property Price Is Fair. Off-plan instalments set by a developer do not automatically change because of this decision, but buyers who plan future bank finance should check that separately.

• Ask how the mortgage contract handles the new rate.
• Base decisions on property-specific evidence.
• Separate developer instalments from future bank financing.