PERSONAL FINANCEUAE Base Rate 3.9%: What It Means for Mortgages, Loans and Savings

UAE Base Rate at 3.9%: What Changes for Your Money

The Central Bank of the UAE raised its Base Rate by 25 basis points to 3.9% from 3.65%, effective Thursday 17 September 2026. The move followed the US Federal Reserve’s quarter-point increase the day before. The dirham is pegged to the US dollar, so UAE policy rates follow the Fed. This page explains how a change like this reaches your own accounts.

The rates that moved

How it reaches you

• Fixed-rate mortgages and loans: unchanged until the fixed period ends. Check when yours resets.
• Variable-rate mortgages and loans: many are priced off EIBOR, the inter-bank rate, which tends to follow the Base Rate. Your lender adjusts the payment at the next review date set in your contract.
• New borrowing: usually costs more, but each bank sets its own margin, so the rise is not an automatic 0.25 percentage points on every product.
• Credit cards: charges follow your card terms, not the Base Rate, so you will not see a sudden jump.
• Savings and fixed deposits: yields may rise as banks compete for deposits, but some will lift only certain terms or balances. Compare offers.

A worked example

Take a variable-rate mortgage of AED 1,000,000 over 25 years. If the full quarter-point rise passed through, moving from 5.00% to 5.25%, the monthly payment would go from about AED 5,846 to about AED 5,992, roughly AED 147 more a month. This is an illustration only. Your actual change depends on your contract, margin and reset date.

What to do now

1. Find out whether your loan is fixed or variable and when it next resets.
2. Ask your lender in writing what your new rate and payment will be.
3. Compare deposit and savings rates before you leave cash idle.
4. If you are about to buy, ask lenders to show total repayments at today’s rate and at one point higher.

Also see our guides on Dubai rent increase rules and Flexi Rent if rising costs are squeezing your housing budget.