Answers
Do the same rules apply to Islamic home finance?
A short answer, with the article it comes from.
The answer
Yes. The Central Bank's mortgage circular applies to Shari'ah compliant home finance in full, so the same loan to value caps, debt burden limit and 25 year maximum term apply. The differences are in the contract and its disclosures, and in early settlement, where an Islamic lender may charge only in relation to its actual costs.
CBUAE Circular 31/2013 Article 6; CBUAE Consumer Protection Standards Clauses 2.1.1.33, 2.1.1.42 and 11.1.2.3, and Annexure item 35; CBUAE Regulation 29/2011 Appendix 2 item 35; checked 2 October 2026.
Article 6 of the circular says that, in addition to the requirements of each Shari'ah advisory committee, "the requirements laid down in these Regulations should also be complied with while granting mortgage loans under Shari'ah principles". An Islamic bank works to the same caps as a conventional one.
The Consumer Protection Standards add disclosures particular to Islamic finance. The bank must disclose the Shari'ah basis of the product and its approval by the internal Shari'ah supervision committee, and the Shari'ah basis should also appear in the Key Facts Statement, and the underlying contract should give a cooling-off option of 5 complete business days.
Early settlement differs. A home loan's early settlement fee is capped at 1 percent of the balance or AED 10,000, whichever is less, plus VAT, and for Islamic finance the Standards add that fees may not be imposed "except in relation to the actual costs incurred" by the institution, in line with the Higher Shari'ah Authority resolution on early settlement.
Profit rates on Islamic finance are priced by each bank and compare like any other rate. A specialist can set the Islamic and conventional options for your case side by side.
Rules are the easy part. Your file is the question.
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