Home Equity Loan
A home equity loan is a second-lien financing arrangement allowing property owners to borrow against accumulated equity, featuring fixed amounts, separate from primary mortgages, and secured by the same property.
| Loan Structure | Terms |
| Position | Second lien behind primary mortgage |
| LTV combined | 75-80% maximum including first mortgage |
| Interest rate | 1-2% above first mortgage rates |
| Loan term | 5-15 years typical |
| Repayment | Fixed monthly payments |
| Available Amount Calculation | Example |
| Property value | AED 2,500,000 |
| Maximum combined LTV (80%) | AED 2,000,000 |
| First mortgage balance | AED 1,200,000 |
| Available home equity loan | AED 800,000 |
| Common Applications | Use Case |
| Property acquisition | Down payment for second property |
| Renovation | Major property improvements |
| Debt consolidation | Repay high-interest obligations |
| Business funding | Alternative to commercial loans |
Related Terms
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