A buyer who has paid half the price of an unfinished apartment may still struggle to fund the remaining instalments. Payments can fall due before the apartment is available to occupy or let. Much of the buyer’s cash is already committed, while the property cannot yet generate income.
An off-plan mortgage could help fund those payments before handover. On 4 September, Abu Dhabi property developer Aldar and Abu Dhabi Commercial Bank (ADCB) announced that they had completed the emirate’s first off-plan mortgage under a new Abu Dhabi Real Estate Centre (ADREC) framework. It allows the bank to be named on the mortgage registration certificate before handover, enabling qualifying buyers who have paid 50% to arrange financing for the remaining instalments and final payment.[1]
Buyers reserving other properties still need confirmation that their project and payment schedule qualify, and that they will meet the bank’s lending requirements.
The bank can register its interest before completion
A lender needs to assess the borrower and property and be able to register and enforce its security. The new framework permits registration of the bank’s interest while the property is unfinished. Credit approval and the conditions for releasing funds still have to be satisfied.
Off-plan purchases dominate Abu Dhabi’s residential sales. ADREC, the emirate’s real estate regulator, recorded AED70.4 billion ($19.17bn) in residential unit sales in the first half of 2026, with off-plan transactions accounting for 89% of value and 82% of deals. Its report also projected about 71,000 additional residential units across the emirate by 2030.[2]
With most sales agreed before completion, borrowing during construction could help developers collect later instalments while allowing buyers to retain cash for other needs. Brokers would also have another financing option to discuss when explaining payment plans.
Eligibility depends on the developer, construction progress, registration requirements and the borrower’s finances. A mortgage available for one project or purchaser may not be available for another. Developers and brokers therefore need to understand which projects qualify and what buyers must satisfy before presenting it as a financing option.
Pre-approval may need renewal before the loan is used
ADCB’s April launch announcement offered eligible buyers pre-approval for up to 50% of an off-plan property’s value. It described validity for up to 12 months with annual renewal, followed by final approval and financing once 50% had been paid or at handover.[3] If construction continues beyond the 12-month approval period, the buyer may need to renew the pre-approval before borrowing.
The UAE central bank’s mortgage rules set a maximum 50% loan-to-value ratio for off-plan purchases. They also require an assessment of sustainable income and existing obligations, with mortgage stress testing above the prevailing interest rate.[4] A borrower may receive less than the maximum permitted under those rules.
Paying half the price does not entitle the buyer to borrow the other half. The lender must still approve the borrower, property and transaction when financing is required. Final approval determines the loan amount, while the drawdown arrangements govern when the money can be released.
Consider a buyer purchasing an AED2 million apartment. The buyer pays AED1 million and expects a mortgage for the remaining AED1 million. If the bank ultimately approves only AED900,000, another AED100,000 must come from the buyer, alongside any acquisition or financing costs not covered by the loan.
Timing can create a separate problem even when the loan amount is sufficient. An instalment may fall due before the lender completes the procedures required to release funds. Pre-approval alone does not confirm that the money will arrive before the developer expects payment.
Borrowing adds interest to the wait for handover
Earlier borrowing can preserve cash while adding interest expense during construction. The apartment still produces no rental income until it can be let. If completion is delayed, the borrower may carry the debt for longer before income begins. Whether repayments start immediately, interest is serviced separately or another arrangement applies depends on the loan terms.
A mortgage may therefore reduce the cash needed for an instalment while increasing the total cost of holding the property. The buyer’s budget must accommodate their own payments and financing charges throughout the period before occupation or letting.
Mortgage approval does not guarantee timely completion or the rent and resale value advertised to buyers.
Banks are also exploring construction-period financing in Dubai. Emirates NBD, the UAE banking group, announced a September partnership with investment company Shamal for off-plan projects under construction, describing structured mortgage support after buyers secure the initial 50% of value.[5]
The loan must arrive before the instalment falls due
When an agency describes financing as available, the offer remains subject to the lender’s requirements, project eligibility and final approval. When the bank releases the money matters as much as how much it lends. If it lends less than expected or releases the money later, the buyer must find the cash to pay the developer.
Developers can reduce the risk by providing the documents banks need and allowing time for registration and approval before instalments fall due. Even an eligible purchaser may struggle to pay on time if either process is still pending.
If the loan falls short, the buyer’s options will depend on what the purchase agreement allows. An extension or revised payment schedule cannot be assumed. Relying on rising prices to sell before the next instalment is also uncertain: access to a mortgage does not ensure that a buyer can find a purchaser when cash is needed.
The new mortgage option could ease the pressure of later instalments. But buyers still need to know how much the bank will lend, when it will release the money and how they would cover any shortfall.
Sources
[2] ADREC, Abu Dhabi Real Estate Market Report H1 2026 announcement, 18 August 2026
[3] ADCB, off-plan mortgage launch and conditions, 30 April 2026
[4] Central Bank of the UAE, Regulations Regarding Mortgage Loans
[5] Emirates NBD, financing partnership with Shamal, 10 September 2026
Image is illustrative