EIBOR stands for Emirates Interbank Offered Rate. It is the benchmark interest rate at which UAE banks lend to one another and is set daily by the UAE Central Bank. Most variable-rate mortgages in the UAE are priced as EIBOR plus a fixed bank margin — so when EIBOR rises or falls, your monthly mortgage payment changes accordingly.

Which EIBOR tenor do UAE banks use for mortgages?

Most UAE banks link variable-rate mortgages to the 3-month EIBOR. Some banks use the 1-month EIBOR, a smaller number use the 6-month EIBOR, and very few use the 1-year EIBOR. The specific tenor used by your lender is stated in your mortgage offer letter and affects how frequently your rate is reset.

How does EIBOR affect my mortgage monthly payment?

During a fixed-rate introductory period (typically 1–5 years), EIBOR does not affect your payment. After the fixed period ends, your rate becomes: bank margin + prevailing EIBOR. For example, with a 1.75% margin and a 3-month EIBOR of 3.66%, your follow-on rate would be 5.41% p.a. If EIBOR falls, your payment decreases; if it rises, your payment increases.

Should I choose a fixed or EIBOR-linked variable mortgage in 2026?

With the 3-month EIBOR at 3.66% following successive US Federal Reserve rate cuts in 2024–2025, variable rates are highly competitive. Fixed rates starting around 4.49–4.99% offer payment certainty. If EIBOR continues to fall, variable-rate borrowers benefit directly. If you prefer stability, a 1–3 year fixed period before reverting to variable is the most popular structure in 2026. Mortgage Market models both scenarios for your specific loan size and tenure.

What is a typical UAE mortgage rate structure linked to EIBOR?

A typical UAE variable mortgage offer looks like this: a fixed introductory rate (e.g. 3.99% p.a.) for 1–3 years, followed by a follow-on rate of bank margin (e.g. 1.75%) + 3-month EIBOR for the remaining tenure. At today's EIBOR of 3.66%, the follow-on rate on that example would be 5.41% p.a. Margins below 1.75% are considered competitive in the current market.

Will EIBOR rates go down in 2026?

EIBOR closely tracks the US Federal Reserve's federal funds rate because the UAE dirham is pegged to the US dollar. Following the Fed's rate cuts in H2 2024 and early 2025, EIBOR has declined from its 2023 peak. The trajectory in 2026 depends on US monetary policy and global inflation data. Mortgage Market tracks 10 years of EIBOR history to help borrowers time their rate decisions.

Can I switch from a variable EIBOR-linked mortgage to a fixed rate?

Yes. If your existing mortgage has reverted to a variable EIBOR-linked rate and you want payment certainty, you can refinance (mortgage buyout) to a new lender offering a fixed introductory period. The early settlement fee is capped by the UAE Central Bank at 1% of the outstanding balance or AED 10,000, whichever is lower. Mortgage Market compares buyout options across 25+ UAE banks to identify whether switching saves you money overall.

EIBOR Rates

Q: What is the current EIBOR rate in the UAE?

As of 31 March 2026, the EIBOR rates are: 1-month EIBOR: 3.65%, 3-month EIBOR: 3.66%, 6-month EIBOR: 3.71%, and 1-year EIBOR: 3.91%. Mortgage Market updates these figures monthly in line with UAE Central Bank publications.

EIBOR Rates & UAE Variable Mortgage Guide

Understand How EIBOR Moves — and What It Means for Your Monthly Mortgage Payment

Every variable-rate mortgage in the UAE is linked to EIBOR — the Emirates Interbank Offered Rate. Yet most buyers sign a mortgage without fully understanding what that linkage means for their monthly payment once their initial fixed period ends. The result is an unexpected increase in outgoings that nobody planned for.

This guide explains what EIBOR is, how it is set, how it connects to your mortgage rate, and — crucially — how to use current EIBOR levels to make a smarter fixed vs. variable rate decision. Mortgage Market has tracked UAE EIBOR movements for over 10 years and uses this data to match every client to the right rate structure for their situation.

Live Benchmark

EIBOR Rates — 31 March 2026

View Full History →

1 Month 3.65% p.a.

Most Common 3 Month 3.66% p.a.

6 Month 3.71% p.a.

1 Year 3.91% p.a.

Source: UAE Central Bank. Value date: 2 April 2026. For historical trend data, visit our EIBOR history page.

What Is EIBOR and How Is It Set?

EIBOR — the Emirates Interbank Offered Rate — is the benchmark interest rate at which major UAE banks lend money to one another on a short-term basis. It is published daily by the UAE Central Bank and is calculated as the trimmed average of rates submitted by a panel of UAE and international banks active in the local interbank market.

EIBOR is published in four main tenors: 1-month, 3-month, 6-month, and 1-year. These reflect the cost of borrowing over those specific time horizons. The 3-month EIBOR is the most widely used benchmark in UAE mortgage contracts, though some lenders use the 1-month or 6-month figure instead.

Because the UAE dirham is pegged to the US dollar, EIBOR moves closely in line with the US Federal Reserve’s interest rate decisions. When the Fed raises rates, EIBOR tends to rise shortly after. When the Fed cuts, EIBOR typically follows downward — though the timing and magnitude can differ. This direct connection to US monetary policy is one of the most important things a UAE mortgage borrower needs to understand.

The key principle: EIBOR itself is not your mortgage rate. Your variable mortgage rate is EIBOR plus a fixed margin set by the bank — typically between 1.25% and 2.25% per annum. When EIBOR changes, your margin stays constant, but your total rate changes with it.

How EIBOR Connects to Your Actual Mortgage Rate

Most UAE mortgages have two distinct rate periods. Here is how they work in practice.

Real Mortgage Example AED 2,000,000 purchase — 25-year term

Phase 1 Years
1 – 3

Fixed Introductory Rate: 3.99% p.a.

Predictable

Your monthly payment is fixed for the first three years regardless of where EIBOR moves. This provides certainty and is typically the rate advertised by banks. EIBOR has no effect on your payment during this period.

Phase 2 Year 4
onwards

Variable Rate: 1.75% margin + 3M EIBOR

EIBOR-Linked

From Year 4, your rate resets every quarter to 1.75% (your fixed bank margin) plus whatever 3-month EIBOR is at that reset date. Your monthly payment will be different every three months from this point.

If EIBOR = 3.66% 5.41% Your total rate

If EIBOR = 2.50% 4.25% Your total rate

If EIBOR = 5.00% 6.75% Your total rate

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Your Bank Margin Is Fixed for Life — Your EIBOR Component Is Not

When you compare mortgage offers from different banks, pay close attention to the margin, not just the advertised rate. A bank offering 1.25% margin will be cheaper than one offering 2.25% margin for the entire remaining life of your loan after the fixed period ends — regardless of where EIBOR goes. Use our product comparison page to see current margin offers side by side.

Which EIBOR Tenor Applies to Your Mortgage?

Different UAE lenders link their variable rates to different EIBOR tenors. This affects how often your rate resets and how quickly EIBOR changes flow through to your payment.

EIBOR Tenor

Reset Frequency

What It Means for You

1-Month EIBOR

Monthly

Your payment recalculates every month. Fastest response to rate cuts but also fastest exposure to rises

3-Month EIBOR Most Common

Quarterly

Used by the majority of UAE banks. Balances responsiveness to market changes with quarterly payment stability

6-Month EIBOR

Every 6 months

Slower to reflect rate moves. Slightly more payment predictability but lags in a falling rate environment

1-Year EIBOR

Annually

Least common in mortgage contracts. Rate is fixed for a full year at a time post introductory period

Your mortgage offer document will clearly state which EIBOR tenor it uses. If you are unsure, your personal mortgage consultant will explain the implications of each during your consultation before you choose a lender.

Not Sure Whether to Fix or Go Variable?

Speak to a UAE Mortgage Specialist About Your Rate Decision

Our consultants have tracked EIBOR movements for over 10 years. In a free 30-minute call, we can tell you which rate structure — fixed, variable, or hybrid — is most likely to save you money based on where EIBOR is heading and your specific mortgage profile.

Model Your Payments WhatsApp a Specialist

Fixed Rate vs. Variable Rate: How to Decide

The right answer depends on where EIBOR is now, where it is likely to go, and your own financial circumstances.

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Consider a Longer Fixed Period If…

EIBOR is currently low and expected to rise with US Fed decisions
Your income is fixed and you need payment certainty for budgeting
You plan to stay in the property for more than 5 years
You have other financial pressures that make rate volatility risky
The fixed-to-variable spread makes locking in genuinely attractive

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Consider a Shorter Fixed Period If…

EIBOR is elevated and rate cuts are expected over the next 1–2 years
You want to benefit from falling rates when your fixed period ends
You may sell or refinance within a short timeframe
The margin offered by the bank is below 1.75% — a genuinely competitive long-term position
You have the financial flexibility to absorb modest payment increases if cuts are delayed

At current EIBOR levels (3-month at 3.66%), a borrower with a 1.75% margin would be paying a variable rate of approximately 5.41% p.a. from Year 4 of their mortgage. Whether that is better or worse than a longer fixed rate depends entirely on your opening fixed offer and how EIBOR moves during your term.

Mortgage Market has tracked UAE EIBOR for over a decade. Our consultants do not give a generic answer to this question — they model your specific scenario using our mortgage calculator, compare live offers from 25+ banks, and give you a clear recommendation for your profile and timeline. Check your eligibility first, then book a free consultation to discuss your rate strategy.

How EIBOR Levels Affect Mortgage Buyout Decisions

If you already have a mortgage, EIBOR directly determines whether switching lenders makes financial sense right now.

When your initial fixed-rate period ends, your mortgage automatically reverts to a variable rate set as margin + EIBOR. If EIBOR has risen since you first took your mortgage, your payment may now be significantly higher than it was during your fixed period. This is the most common trigger for a mortgage buyout in the UAE.

A buyout means switching your existing mortgage to a new lender who offers a more competitive rate — either a new fixed introductory rate or a lower margin on the variable component. The saving can be significant. A 0.50% reduction in rate on a AED 1,500,000 outstanding balance saves approximately AED 625 per month — or AED 7,500 per year.

Consider a Mortgage Buyout If Any of These Apply to You

✓

Your fixed-rate period ended in the last 12 months and your payment has increased by more than AED 500/month

✓

Your current bank margin is above 2.00% and you took your mortgage more than 3 years ago

✓

Your fixed period ends in the next 3–6 months and you have not yet compared current market rates

✓

You have seen current introductory fixed rates that are lower than your existing variable rate

Use our buyout calculator to estimate your saving before committing to anything. A Mortgage Market consultant will then run a full comparison across 25+ banks to confirm the most competitive switch offer available for your outstanding balance and remaining term.

10 Years of EIBOR Tracking — What the History Tells Us

Mortgage Market has maintained a continuous EIBOR tracking record for over 10 years. That history reveals several consistent patterns that inform how we advise clients on rate structure decisions today.

EIBOR Follows the Fed

Every significant EIBOR movement over the past decade has followed a US Federal Reserve rate decision, typically within one to two months. Monitoring Fed policy gives the earliest signal of where UAE mortgage rates are heading.

Peaks Have Exceeded 5%

3-month EIBOR has historically peaked above 5% during periods of US rate hiking cycles. Borrowers who were on variable rates during these peaks experienced significant payment increases compared to those who had locked in a fixed rate.

Rate Cycles Last 3–5 Years

EIBOR hiking and cutting cycles in the UAE have historically run for three to five years. This makes the 3-year fixed period offered by most UAE banks a particularly meaningful decision point — you are locking in for exactly one cycle.

Margins Have Narrowed

Bank margins on UAE variable mortgages have compressed over a decade of competition between lenders. Borrowers who took mortgages with margins above 2.5% more than five years ago can often find materially better deals available today. Compare current live margin rates.

Cuts Follow Hikes

Every period of elevated EIBOR in the past decade has been followed by a cutting phase. Borrowers who chose shorter fixed periods during high-EIBOR environments typically benefited when cuts came through, landing on competitive variable rates without penalty.

The full 10-year EIBOR history — including a trend chart across all four tenors — is available on our EIBOR rates history page. We recommend reviewing the trend data before your consultation to give context to the rate options your consultant presents.

Frequently Asked Questions About EIBOR

Clear answers to the most common EIBOR and variable mortgage questions from UAE buyers.

What is EIBOR and who sets it?+

EIBOR — the Emirates Interbank Offered Rate — is the daily benchmark interest rate at which UAE banks lend to one another on a short-term basis. It is published every business day by the UAE Central Bank, calculated as the trimmed average of rates submitted by a panel of banks active in the UAE interbank market. It is published across four tenors: 1-month, 3-month, 6-month, and 1-year.

How does EIBOR affect my monthly mortgage payment?+

During your fixed introductory period, EIBOR has no effect on your payment — the rate is locked. Once your fixed period ends, your rate resets to your bank margin plus the relevant EIBOR tenor at each reset date. If EIBOR rises by 0.50%, your total rate rises by 0.50% and your monthly payment increases accordingly. The reverse is true when EIBOR falls.

What is the current EIBOR rate in the UAE?+

As of 31 March 2026: 1-month EIBOR is 3.65%, 3-month EIBOR is 3.66%, 6-month EIBOR is 3.71%, and 1-year EIBOR is 3.91%. Rates are published daily by the UAE Central Bank and updated on our EIBOR history page, which also includes the full 10-year trend chart.

Why does EIBOR follow US Federal Reserve decisions?+

The UAE dirham is pegged to the US dollar at a fixed exchange rate. To maintain this peg, the UAE Central Bank broadly follows the US Federal Reserve in setting interest rate policy. When the Fed raises its benchmark rate, EIBOR typically rises within weeks. When the Fed cuts, EIBOR follows downward. This linkage means US monetary policy directly affects the cost of every variable-rate mortgage in the UAE.

Should I choose a fixed or variable mortgage rate given current EIBOR levels?+

There is no single right answer — it depends on your financial situation, how long you plan to hold the property, and where EIBOR is in its cycle. At current 3-month EIBOR of 3.66%, a borrower with a 1.75% margin would pay approximately 5.41% variable from Year 4. A mortgage consultant can model this against available fixed offers and tell you which structure saves more money for your specific loan amount and remaining term. Use our mortgage calculator to run scenarios, then speak to a personal consultant for a recommendation.

Is EIBOR the same as the mortgage interest rate?+

No. EIBOR is the base benchmark rate. Your actual mortgage rate is EIBOR plus a fixed margin set by the bank (typically 1.25%–2.25%). So if 3-month EIBOR is 3.66% and your margin is 1.75%, your variable mortgage rate is 5.41%. The margin never changes for the life of your loan; only the EIBOR component fluctuates.

Do Islamic mortgages in the UAE use EIBOR?+

Islamic finance products in the UAE (typically Murabaha or Ijara structures) do not charge interest in the conventional sense. However, the profit rates applied to these products are generally priced with reference to EIBOR as a market benchmark to ensure they remain competitive with conventional equivalents. In practice, Islamic mortgage pricing broadly tracks the conventional EIBOR-linked market, which is why monitoring EIBOR is relevant for all UAE mortgage borrowers. Speak to a personal mortgage consultant to compare conventional and Islamic options side by side.

Not Sure How EIBOR Affects Your Mortgage? Ask an Expert.

Mortgage Market has tracked EIBOR movements for over 10 years. In a free consultation, our dedicated advisors will model your specific mortgage against current EIBOR levels, compare 25+ bank offers, and recommend the rate structure most likely to save you money — at zero cost to you.

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