Middle East Business
Off-plan home finance is tied to developer milestones in a new UAE product
By Staff Writer | 23 August 2026
Dubai Islamic Bank will fund up to half the value of an under-construction freehold home, releasing money to the developer against the agreed milestone plan and charging only the profit element until handover.
Dubai Islamic Bank has launched an off-plan home finance product for buyers of freehold property that is still being built. The bank says it will lend up to 50 per cent of the property value, and that it will release the remaining tranche payments to the developer in line with the milestone plan agreed for the building, up to delivery.
During the construction period the buyer pays only the profit component. That amount rises progressively as each tranche is drawn down. The full monthly instalment of principal and profit starts on handover of the property, or 24 months after the finance is taken out, whichever comes first. The product is Shariah compliant and is open to eligible UAE nationals, residents and non-residents.
As customer preferences evolve, especially within the off-plan segment, home finance must also become more flexible, transparent and aligned with how people buy property today. Our new Off-Plan Home Finance proposition is designed to support customers through the construction journey by easing financial pressure in the early stages and aligning payments with developer milestones.
Sanjay Malhotra, Chief Consumer Banking Officer at Dubai Islamic Bank
Why a lender's milestone plan matters on site
Off-plan sale in the UAE already runs on a payment plan tied to construction progress. What changes when a bank sits behind that plan is who is watching the milestones, and with what remedy. A tranche released against a stage certified as reached puts a third party with money at stake into the same evidential chain that a contractor, an engineer and a purchaser already occupy.
Anyone advising on a delayed off-plan tower should assume that the milestone dates in the sale agreement, the certificates that record them and the drawdown record held by the financier will all be produced together. Where they disagree, the disagreement is the claim.
The practical effect on the buyer is a lower cash cost during the build and a higher one once the building is finished. The practical effect on the developer is that a slipping programme now delays a payment from a bank rather than a payment from an individual purchaser, which is a different conversation to have.
What has not been published
The announcement gives the finance-to-value limit, the profit-only construction period and the 24 month long stop. It does not give the profit rate, the fee structure, the eligibility criteria in any detail, or the list of developers whose milestone plans the bank will accept. The bank says it is exploring arrangements with UAE developers to widen access across major freehold projects, and has named none of them.
Nor has anything been said about what happens if the milestone plan is not met. A 24 month long stop on the deferral is a date, and the announcement does not say whether it moves if the building does. That is the term a purchaser financing a late tower will want to read first.
Sanjay Malhotra said the product reflects the bank's focus on Shariah compliant solutions connected to the needs of the market. The market it is aimed at is a large one: off-plan sale carries a substantial share of UAE residential transactions, and the construction phase is where the risk in those transactions sits.