How can salary transfer offers influence mortgage repayment in the UAE?

In the UAE, a salary transfer offer can impact your mortgage repayments in the following ways:

• End-of-service gratuity: If you opt for a salary transfer, your employer will provide an undertaking to the bank that any end-of-service benefits you receive upon leaving your job will be transferred to the bank. This serves as a guarantee for the mortgage payments.
• Preferential rates: Some banks may offer slightly lower interest rates if you choose to transfer your salary to them. However, whether these discounted rates are advantageous depends on your specific situation. It's best to consult with mortgage experts to determine if the savings justify the salary transfer.
• Job changes: If you switch jobs while having a salary transfer mortgage, the bank may freeze your end-of-service benefits until you provide proof of continued employment and ability to make mortgage payments.

Many prefer a non-salary transfer mortgage as it avoids potential complications if you change jobs or move out of the UAE. The slightly higher interest rate (typically 0.18%) is often considered worth it for the added flexibility and lack of restrictions on your end-of-service benefits.