What is Lombard Loan?
Кредит, обеспеченный финансовым портфелем (акции, облигации, фонды), а не недвижимостью,, позволяет состоятельным инвесторам получить ликвидность для покупки объектов без продажи портфеля.
Description
A Lombard loan is a credit facility secured against the borrower's financial assets, equities, bonds, mutual funds, or other securities, rather than the property itself. The borrower pledges their portfolio as collateral and receives a loan (typically 50%-80% of portfolio value) at relatively low interest rates. This allows real estate investors to access purchase capital without selling their investments, maintaining portfolio exposure while funding property acquisitions.
Private banks and wealth management divisions in the UAE (UBS, Julius Baer, Credit Suisse successor entities) offer Lombard loans to high-net-worth clients. A client with a USD 5M portfolio might borrow USD 3M at SOFR + 1%-2% to purchase a Dubai villa. The key risk is margin calls, if the pledged portfolio's value drops below a threshold, the borrower must add collateral or repay part of the loan.
How to interpret
A Lombard loan offers a different debt financing profile than a mortgage. The collateral is the financial portfolio, not the property. This means the borrower retains full beneficial ownership of both the portfolio and the property without encumbering the property itself. However, it creates dual debt financing risk: a falling portfolio triggers margin calls while the property investment may simultaneously face its own challenges.
Lombard loans are most appropriate for investors who have a deliberate portfolio strategy and do not want to reshape their financial investments to fund a real estate acquisition. The interest rate, typically lower than mortgage rates, can make this an efficient funding mechanism when markets are stable.
Контекст рынка Дубая
Private banks active in the UAE, including Julius Baer, UBS, and local wealth management divisions of FAB and Emirates NBD, offer Lombard facilities to qualifying high-net-worth clients. Minimum portfolio sizes for Lombard lending typically start at USD 1-2 million. The facility is structured as a credit line against the pledged portfolio, drawdown on demand.
The UAE's wealth management sector is growing rapidly, with Dubai establishing itself as a regional and global wealth hub. This growth is increasing the availability and competitiveness of Lombard lending products. Investors with significant financial portfolios held in Dubai private banking relationships have increasing options for Lombard-backed property financing.
Frequently asked questions
A loan secured against a financial portfolio (stocks, bonds, funds) rather than real estate, allowing investors to access capital for property purchases without liquidating their investments.
A Lombard loan is a credit facility secured against the borrower's financial assets, equities, bonds, mutual funds, or other securities, rather than the property itself. The borrower pledges their portfolio as collateral and receives a loan (typically 50%-80% of portfolio value) at relatively low interest rates.
A Lombard loan offers a different debt financing profile than a mortgage. The collateral is the financial portfolio, not the property.
Private banks active in the UAE, including Julius Baer, UBS, and local wealth management divisions of FAB and Emirates NBD, offer Lombard facilities to qualifying high-net-worth clients. Minimum portfolio sizes for Lombard lending typically start at USD 1-2 million.
Oliva feeds Lombard Loan 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.
A client with a USD 5M portfolio might borrow USD 3M at SOFR + 1%-2% to purchase a Dubai villa. The key risk is margin calls, if the pledged portfolio's value drops below a threshold, the borrower must add collateral or repay part of the loan.
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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.