Answers
Can I make a partial prepayment on my mortgage?
A short answer, with the article it comes from.
The answer
Yes, on the terms in your contract. The Central Bank caps the partial settlement charge on a home loan at 1 percent of the outstanding balance or AED 10,000, whichever is less, plus VAT, and once you prepay, the interest must be adjusted to the principal that remains.
CBUAE Regulation 29/2011 Appendix 2 item 41; CBUAE Consumer Protection Standards Annexure item 41 and Clauses 2.1.3.7, 2.1.3.8 and 7.1.5.12; checked 2 October 2026.
The cap is item 41 of the Central Bank's schedule of maximum retail fees: "Partial Settlement Charges Max 1% of outstanding balance or 10,000, whichever is less", a figure set before VAT. The Consumer Protection Standards add that after a partial early settlement "the interest must be proportionately adjusted based on the principal remaining".
Your bank must disclose whether early settlement is possible and which fees apply, and your Key Facts Statement must show a worked example of the early settlement fee. Any limits on when or how much you can prepay are in your contract, so read it before you plan around a lump sum.
A prepayment either shortens the term or lowers the monthly payment, depending on what your bank offers and what you ask for. At the same rate, shortening the term saves more interest; lowering the payment frees room in your debt burden for future borrowing.
It is worth checking whether the money would do more elsewhere first, for example against a debt at a higher rate. A specialist can run the numbers on your balance and rate.
Rules are the easy part. Your file is the question.
Have a lump sum to put in? Talk to a Specialist about how to use it.