If you have a variable UAE mortgage — or a fixed deal that reverts after a few years — your payment is ultimately driven by one number: EIBOR. Understanding it tells you why your rate can move, and what it is likely to do when your fixed period ends.
What EIBOR actually is
EIBOR stands for the Emirates Interbank Offered Rate — the rate at which UAE banks lend to each other. It is published by the Central Bank of the UAE and acts as the local benchmark, much like SOFR in the US or SONIA in the UK. When you hear that "rates have gone up", for mortgages that usually means EIBOR has moved.
How your rate is built: EIBOR + margin
A variable mortgage rate is almost always quoted as EIBOR + a fixed margin. For example, a bank might offer 3-month EIBOR + 1.99%:
- EIBOR is the moving part — it rises and falls with the market and is reset at a set interval (1-month, 3-month, 6-month or 1-year, depending on your product).
- The margin (here 1.99%) is fixed for the life of the loan — it is the bank's slice and does not change.
So if EIBOR is 4.5% and your margin is 1.99%, your rate is 6.49%. If EIBOR later falls to 3.5%, your rate falls to 5.49% — the margin stays put either way.
Why "fixed" rates still depend on EIBOR
Most UAE "fixed" mortgages are only fixed for an introductory period — often 1 to 5 years. After that, they revert to EIBOR + margin (the "follow-on" or reversion rate). That matters in two ways:
- When your fixed period ends, your payment re-prices to wherever EIBOR sits then.
- The bank stress-tests you against that reversion rate from the start — not the low intro rate — which is why you qualify for less than the headline rate suggests. See our guide to the UAE stress test.
Should that push you to fixed or variable?
Neither is "better" — they trade certainty for flexibility. A fixed period shields you from EIBOR rises for a few years; a variable lets you benefit immediately if EIBOR falls (and usually has lower or no early-settlement penalties). We weigh the two in detail in fixed vs variable mortgage rates.
One thing we won't do: quote today's EIBOR. It changes constantly, so any number printed here would be out of date by the time you read it. Check the current EIBOR on the Central Bank of the UAE website, then add your bank's margin to see your real rate.
See it in your own numbers
The rate you key into a calculator should be your all-in rate (EIBOR + margin), and for affordability you should also check the higher stress-test rate. Run both through the mortgage eligibility calculator to see how a 1–2% swing in EIBOR changes both your monthly payment and the maximum a bank will lend you.