What is Comisión de Originación?
Cargo cobrado por el prestamista para procesar una nueva solicitud hipotecaria, cubriendo suscripción, preparación de documentos y administración, expresado como porcentaje del préstamo.
Description
An origination fee is an upfront charge by a mortgage lender for creating a new loan. It covers the bank's costs of evaluating the application, verifying documents, conducting credit checks, and preparing loan documentation. In the UAE, origination fees are sometimes called 'arrangement fees' or 'processing fees.'
UAE banks typically charge mortgage arrangement fees of 0.25-1% of the loan amount, with some banks offering to waive or reduce this fee for competitive deals. On a AED 2M mortgage, a 1% fee is AED 20,000. This is usually payable at the time of loan disbursement. Always factor origination fees into total acquisition cost calculations.
Compare offers from multiple banks, arrangement fees are negotiable
Ask if the fee can be added to the loan amount rather than paid upfront
Some mortgage brokers can secure fee waivers as part of package deals
How to interpret
Origination fees are part of the total cost of borrowing and should be factored into your effective interest rate calculation. A lower interest rate with a high origination fee may cost more over a short hold period than a slightly higher rate with no fee. Calculate the break-even point based on your expected hold period to determine which combination is most cost-effective.
Using a mortgage broker often results in better terms than approaching banks directly. Brokers process high volumes of loans with multiple banks and can negotiate fee waivers or reduced rates that individual applicants cannot access. The broker's fee (typically 0.5-1% of the loan amount) is often offset by the savings they negotiate.
Contexto del mercado de Dubái
UAE banks operate in a competitive mortgage market, particularly for well-qualified borrowers. Origination fees are one of the most negotiable components of a mortgage offer. Banks routinely waive or reduce fees for clients with strong profiles, existing banking relationships, or large loan amounts. Shopping multiple banks simultaneously is standard practice and does not negatively affect credit assessments.
For investment property mortgages (as opposed to owner-occupied), UAE banks apply stricter underwriting criteria and may charge higher origination fees. The Central Bank's mortgage regulations distinguish between first-home and investment property mortgages with different LTV limits, and banks often price investment loans at a premium to reflect the higher regulatory capital requirements.
Frequently asked questions
A fee charged by a lender for processing a new mortgage application, covering underwriting, document preparation, and administration, typically expressed as a percentage of the loan amount.
An origination fee is an upfront charge by a mortgage lender for creating a new loan. It covers the bank's costs of evaluating the application, verifying documents, conducting credit checks, and preparing loan documentation.
Origination fees are part of the total cost of borrowing and should be factored into your effective interest rate calculation. A lower interest rate with a high origination fee may cost more over a short hold period than a slightly higher rate with no fee.
UAE banks operate in a competitive mortgage market, particularly for well-qualified borrowers. Origination fees are one of the most negotiable components of a mortgage offer.
Oliva feeds Origination Fee into a proprietary 6-dimension score that rates eparticularly Dubai project on Financial Value, Market Dynamics, Location, Developer Trust, Risk, Macro Context, and Liquidity. This keeps comparisons consistent across hundreds of listings.
Always factor origination fees into total acquisition cost calculations. Compare offers from multiple banks, arrangement fees are negotiable Ask if the fee can be added to the loan amount rather than paid upfront Some mortgage brokers can secure fee waivers as part of package deals
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This content is for educational purposes only and does not constitute investment, financial, legal, or tax advice. Yields, returns, and market data referenced are historical or estimated and are not guaranteed. Capital is at risk. Seek independent professional advice before making investment decisions. Oliva is a licensed Dubai real estate advisor (DLD Broker Card: 92025, RERA BRN: 1573501). Read our Key Risks Disclosure and Disclaimer.