232 dirhams monthly increase in the value of the premium for every million borrowed

After raising the interest, the transfer of “real estate financing” from one bank to another is not in the interest of the client

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Two bankers said that transferring real estate finance from one bank to another, after raising the current interest rate, in addition to the expected hike in the coming months, is not in the interest of the borrowing customer, unless the new installment constitutes a great burden on him, in addition to the availability of good offers or negotiation with the bank in which he is located.

They explained that the value of the monthly increase in the premium will amount to 232 dirhams after the interest increase for every one million dirhams borrowed.

He explained to "Emirates Today" that the largest proportion of the installments goes at the beginning of the financing to pay off the agreed profits or interest, so it is not good to move to another bank and start paying new interests in large amounts.

Monthly Installments

In detail, the expert in real estate finance, Ahmed Arafat, said that "the value of the monthly installments of new and existing real estate finances is expected to rise monthly by 232 dirhams for every million dirhams borrowed, that is, 2784 dirhams annually."

Arafat added: “It is preferable at the present time to be calm and not resort to rescheduling Murabaha or transferring debt from one bank to another, as it is expected that the lifting process will continue until the end of this year,” noting that “most banks meet the largest percentage of profits in the first years of The life of the financing or the loan, and it is not good to transfer to another bank and start paying new interests at a high rate.”

He added, "The transfer of real estate finance is currently conditional on specific cases, such as the fact that the new installment, after the interest rate increase, has become a huge burden, here the customer can move to another bank, with an increase in the payment period, or negotiate with his bank to modify the payment periods."

It is noteworthy that the Central Bank of the Emirates raised the basic interest rate by 0.5%, last week, in conjunction with a similar raise by the US Federal Reserve due to the peg of the dirham to the dollar.

Real estate finance is the most affected by the interest rate hike, as a result of linking it to the EIBOR rate, up and down.

interest or profits

For his part, the banking expert, Amjad Nasr, said, “The largest percentage of the value of the monthly installment in real estate finance goes to interest or profits, so the customer must realize that his transfer to another bank, after a long period of payment, is not in his interest, and it is It is better to wait a little longer, in light of the interest rate hike.”

Nasr stated, "The customer who is forced to transfer his financing should look for banks that provide strong offers, including not increasing the interest rate or raising it by a small percentage, and this is usually offered by large banks, and the customer can also negotiate with his bank so that the interest rate is reduced and not raised. The value of the monthly installment is very much.”

Nasr continued: "If the installment constitutes a heavy burden on the customer after the increase in the profits imposed by the bank, he can be forced to transfer his debt to another bank, and other than that, he must wait until things become clear."

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