Purchasing a home is a significant financial commitment and managing your mortgage effectively can lead to substantial savings over time.
There are smart ways that provide practical strategies to help borrowers effectively manage and reduce interest payments, while enhancing long-term financial well-being.
Remember that maintaining a comprehensive budget is essential, covering not only mortgage payments but also other housing-related expenses such as property taxes, insurance, maintenance and utilities.
Additionally, building an emergency fund is imperative to address unexpected costs like job loss or major home repairs.
Regular reviews of the mortgage and overall financial situation, consulting with mortgage advisers, ensuring adequate insurance coverage, taking advantage of prepayment options and maintaining good credit hygiene are all vital practices to manage mortgages effectively and achieve long-term financial stability.
Here’s a breakdown of key points to consider.
1. Refinance with a lower interest rate
One strategy recommended is refinancing, which involves replacing your existing mortgage with a new one at a lower interest rate.
By checking and improving your credit score, you may qualify for better rates.
Lower interest rates can significantly reduce your monthly payments, providing tangible savings over the entire loan term.
However, it is important to note that there fees are applied when refinancing a mortgage.
2. Eliminate mortgage insurance premiums
Another tip is to eliminate mortgage insurance premiums provided you have decent existing cover.
This reduction in monthly expenses allows you to contribute the saved amount towards higher principal recovery, effectively decreasing the interest component of your mortgage payments.
This strategic move not only eases financial burdens but also accelerates the equity building process in loan repayment.
At the same time, we need to acknowledge the value of mortgage-related insurance and take an informed decision only if you already have adequate cover.
Life insurance is a safety feature for home buyers and banks as well. It protects the borrower’s legal heirs and bank in case of an unfortunate event of the borrower’s death or permanent total disability.
In such events, the whole mortgage obligation is settled by the insurance provider with the bank and property becomes free from financial obligation.
Similarly, in property insurance, if there is a natural calamity such as earthquake, flood or any "act of God" and the property is no longer habitable, insurance companies are obligated to settle the outstanding loan with the bank.
3. Debt restructuring
This process typically involves negotiating with creditors to either reduce the principal balance through lump-sum payments or adjust the repayment terms to better align with the borrower's current financial situation.
One aspect of debt restructuring involves making lump-sum part payments towards the outstanding principal balance.
By doing so, borrowers can effectively reduce the overall amount owed, which not only decreases the financial strain but also accelerates the journey towards debt freedom.
These lump-sum payments can come from various sources, such as savings, investments or even asset sales.
Additionally, debt restructuring may entail renegotiating the terms of the loan, such as extending the repayment period, lowering the interest rate or converting variable-rate loans into fixed-rate ones.
These adjustments are made based on the borrower’s ability to repay, ensuring that the revised terms are more sustainable and conducive to long-term financial stability.
By engaging in debt restructuring, borrowers can actively manage their financial obligations and regain control over their economic well-being.
4. Switch to a fixed-rate mortgage
For borrowers with adjustable-rate mortgages, switching to a fixed-rate mortgage could be an option.
This transition provides greater stability and predictability in monthly payments, shielding you from potential interest rate fluctuations in the future.
However, they do come with fixed terms and homeowners will need to reassess this option before it expires as the interest rate could increase and affect payments.
5. Interest offset option
Linking a savings account to your mortgage for an interest offset is another savvy strategy.
This allows you to cut down the interest part from a loan repayment using the balance in your savings account.
The result is a reduction in effective interest rates while maintaining liquidity, providing a balanced approach to mortgage management.
6. Interest hedging through SIP
Consider systematic investment plans (SIP) as a tool for disciplined and regular investments.
SIPs can act as a hedge against rising interest rates, offering benefits such as risk mitigation and consistent savings.
Switching to a fixed-rate mortgage provides greater stability and predictability in monthly payments
Rajender Prasad,
managing director, Money Maestro
7. Accelerated loan repayment
Gradually increasing your repayment by a certain percentage, even if it's a modest 2 per cent to 3 per cent, can have a cumulative impact over time.
This ensures that your loan payments keep pace with your income growth, allowing you to allocate more funds towards the principal amount.
8. Regular partial settlements
Lastly, it’s crucial to highlight the importance of regular, small partial settlements.
Making one additional instalment annually as a partial settlement contributes not only to consistent progress towards debt, but also cultivates financial discipline and leverages the power of compounding.
This approach aligns with long-term savings goals and reinforces a proactive approach to mortgage management.
Rajender Prasad is managing director of Dubai-based independent mortgage advisory firm Money Maestro
The biog
Favourite book: Homegoing by Yaa Gyasi
Favourite holiday destination: Spain
Favourite film: Bohemian Rhapsody
Favourite place to visit in the UAE: The beach or Satwa
Children: Stepdaughter Tyler 27, daughter Quito 22 and son Dali 19
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The biog
Favourite Quote: “Real victories are those that protect human life, not those that result from its destruction emerge from its ashes,” by The late king Hussain of Jordan.
Favourite Hobby: Writing and cooking
Favourite Book: The Prophet by Gibran Khalil Gibran
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
THREE POSSIBLE REPLACEMENTS
Khalfan Mubarak
The Al Jazira playmaker has for some time been tipped for stardom within UAE football, with Quique Sanchez Flores, his former manager at Al Ahli, once labelling him a “genius”. He was only 17. Now 23, Mubarak has developed into a crafty supplier of chances, evidenced by his seven assists in six league matches this season. Still to display his class at international level, though.
Rayan Yaslam
The Al Ain attacking midfielder has become a regular starter for his club in the past 15 months. Yaslam, 23, is a tidy and intelligent player, technically proficient with an eye for opening up defences. Developed while alongside Abdulrahman in the Al Ain first-team and has progressed well since manager Zoran Mamic’s arrival. However, made his UAE debut only last December.
Ismail Matar
The Al Wahda forward is revered by teammates and a key contributor to the squad. At 35, his best days are behind him, but Matar is incredibly experienced and an example to his colleagues. His ability to cope with tournament football is a concern, though, despite Matar beginning the season well. Not a like-for-like replacement, although the system could be adjusted to suit.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
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