What Happens When Your Fixed Mortgage Rate Ends

The fixed period ends. The mortgage continues.

A two-, three- or five-year fixed rate is usually one pricing stage inside a mortgage that may run for decades. When that stage finishes, the mortgage does not need to be renewed from scratch. The next pricing formula in your existing facility takes over.

For many hybrid UAE mortgages, that next stage is variable pricing linked to EIBOR plus the bank's contractual margin.

If you do nothing, the mortgage generally continues under those agreed terms. That is why the most important question near expiry is not simply “What new fixed rates are available?” It is “What exactly am I moving onto if I stay where I am?”

Your next rate should not be a surprise. The formula that follows the fixed period should already be set out in your mortgage documentation — even though the benchmark itself may not be known until the relevant fixing or review date.

Your new rate may be EIBOR + the bank's margin

EIBOR — the Emirates Interbank Offered Rate — is a UAE Dirham benchmark used as a reference rate in financial transactions including mortgages.

Where the post-fixed structure is EIBOR-linked, two parts matter: the benchmark that can move and the bank margin written into your mortgage terms.

Applicable EIBOR + Bank Margin = Variable Mortgage Rate

Suppose, purely as an illustration, your mortgage moves to 3-month EIBOR + 1.50%. If the applicable 3-month EIBOR were 4.00% at the relevant reset, the simplified rate would be 5.50%.

If EIBOR later moves, the rate may be reviewed again according to the facility's reset terms. The lender margin may remain fixed while the benchmark changes.

Illustration only. Actual mortgage pricing depends on the benchmark, fixing date, margin, reset methodology and any floor, cap or other conditions in your facility.

Your monthly payment can rise — or fall

A fixed-rate expiry does not automatically mean a higher instalment. What matters is the rate produced by your mortgage's next pricing formula when the lender applies it.

If that rate is higher than the fixed rate you are leaving, the monthly payment will generally rise. If it is lower, the payment may reduce, subject to the facility terms.

But the percentage movement is only half the story. Your outstanding balance and remaining term determine how that new rate translates into dirhams each month. That monthly figure is the number your household budget actually feels.

Do not compare the percentages only. Ask the lender what the new rate means in actual monthly instalments.

Before comparing new offers, understand the mortgage you already have

Fixed-rate expiry date

The exact date your introductory pricing ends.

EIBOR tenor

Whether your variable pricing references 1-month, 3-month, 6-month or another stated benchmark.

Bank margin

The contractual percentage added to the relevant benchmark.

Review frequency

How often the lender reviews and resets the variable rate.

Floor or other conditions

Any contractual provision that affects how the variable rate is calculated or applied.

Do not work from the rate you remember being quoted several years ago. Pull out the facility letter, Key Facts Statement and any subsequent repricing documentation. A refinancing comparison is only useful once the existing mortgage is understood correctly.

Staying, repricing or switching: compare all three before deciding

The lowest quoted rate does not automatically identify the best route. The decision depends on your remaining balance and term, the rate you are moving onto, the cost of switching, your current eligibility and — importantly — how long you expect to keep the mortgage or property.

Ask what your existing bank can offer

Before approaching a move as the default solution, find out what your existing bank is prepared to do. The contractual post-fixed rate is one number; a retention or repricing option, where available, may be another.

Staying is usually operationally simpler because the mortgage is already in place. But convenience has a value only if the pricing remains sensible. Put any retention proposal beside the external alternatives and compare the fixed period, later margin, fees and flexibility on the same basis.

A competing bank may advertise the lower rate and still fail to produce the better outcome once the costs of leaving one facility and establishing another are included.

Refinancing should be judged on the net saving

A mortgage buyout deserves attention when another lender offers enough improvement to justify moving. A lower rate is the starting point of that calculation, not the conclusion.

Switching can involve an early-settlement charge on the existing facility as well as costs for the replacement mortgage, potentially including processing, valuation, mortgage registration and other completion expenses.

The correct comparison is therefore:

Expected Mortgage Saving − Switching Costs = Potential Net Benefit

Then calculate the break-even period. If switching costs AED 20,000 and the new structure saves roughly AED 1,000 a month, the simplified recovery period is around 20 months. If you expect to sell before then, the lower rate may never become a genuine saving.

Refinancing is not about finding a lower rate. It is about finding enough improvement to justify the cost and effort of changing lenders.

Review the mortgage before the fixed period expires

The useful time to review a fixed-rate expiry is before the new pricing reaches your account. Waiting until the instalment changes turns a planned mortgage review into a reaction.

Starting roughly three to six months before expiry can provide a sensible planning window. It is not a regulatory deadline and there is little value in locking onto live pricing too early. The purpose is to understand your existing terms, check whether your financial profile has changed and be ready to compare realistic options as the expiry approaches.

Confirm the expiry date

Do not estimate it from memory. Check the mortgage documentation.

Calculate the contractual next rate

Identify the benchmark, margin and review mechanics.

Ask for the expected new instalment

Translate the rate change into monthly cash flow.

Check retention options

Find out whether your current lender has another structure available.

Compare suitable external lenders

Use the same outstanding balance, remaining term and realistic holding period.

Calculate switching costs

Do not call refinancing a saving until the costs of moving have been deducted.

The benchmark moves. Your decision should not depend on one day's number.

As a current reference point, CBUAE published 3-month EIBOR at approximately 3.96% and 6-month EIBOR at approximately 4.10% on 4 September 2026.

Those figures are a snapshot, not a forecast and not a mortgage quotation. The relevant number for your mortgage is the benchmark and fixing applied under your facility terms at the relevant review date.

This is why it is more useful to understand the formula than to focus on today's EIBOR alone.

Four things not to do when the fixed rate is ending

Wait for the first higher payment

By then, you have lost useful comparison time.

Compare headline rates only

A new fixed rate without its duration, fees and post-fixed margin is an incomplete comparison.

Assume refinancing must save money

Settlement and new-facility costs can absorb a modest rate advantage.

Ignore your own plans

Your expected property holding period should influence whether switching costs are worth paying.

A fixed-rate expiry is a decision point — not a reason to refinance automatically

The end of the fixed period is one of the natural times to review a UAE mortgage because the pricing you originally chose is about to change.

But the objective is not to refinance for the sake of refinancing. If the existing terms remain competitive, staying may be perfectly rational. If the bank offers a strong retention structure, switching may add cost without enough benefit. And if another lender produces a meaningful net saving or better long-term structure, a buyout may deserve serious consideration.

Understand where the mortgage is going first. Then decide whether it needs to go somewhere else.

Fixed mortgage expiry FAQs

What happens when my fixed mortgage rate ends in the UAE?

For many hybrid mortgages, the facility moves to the variable pricing formula stated in your mortgage documents, often the relevant EIBOR benchmark plus a contractual bank margin.

Will my monthly mortgage payment automatically increase?

No. It depends on the new rate produced by your facility's pricing formula, together with the outstanding balance and remaining term. The payment can rise or fall.

Does 3-month EIBOR mean my mortgage changes every three months?

Not necessarily. The EIBOR tenor identifies the benchmark. Your lender's contractual review schedule determines when the mortgage rate is reset.

Should I refinance as soon as the fixed period ends?

Not automatically. Compare the existing variable rate, any retention offer and the net cost of refinancing before deciding.

How early should I review my mortgage?

Starting roughly three to six months before fixed-rate expiry can provide useful planning time. It is a practical guideline rather than a regulatory deadline.

Can my existing bank offer another fixed rate?

Potentially. Availability and terms depend on the lender's current policy and your facility. Ask the lender whether a retention or repricing option is available.

What should I compare if another bank offers a lower rate?

Compare the fixed-period duration, post-fixed margin, monthly payment, processing and valuation fees, settlement costs, mortgage registration and other switching costs, plus how long you expect to keep the property.