EIBOR: Emirates Interbank Offered Rate

EIBOR is published daily by the UAE Central Bank (CBUAE) and represents the rate at which banks within the UAE are willing to lend funds to one another in UAE Dirhams. It is available across multiple tenors; the 3-month tenor is the one most commonly referenced in retail mortgage contracts. As of March 2026, the 3-month EIBOR rate stands at 3.69%, against a CBUAE base rate of 3.65%.\n\nBecause the UAE Dirham is pegged to the US Dollar, CBUAE monetary policy - and by extension EIBOR - closely tracks decisions made by the US Federal Reserve. When the Fed moves its benchmark rate, EIBOR tends to follow in the same direction and by a similar magnitude, with a short lag. This linkage is structural, not incidental.\n\nFor variable-rate mortgages, the rate a borrower pays is typically EIBOR plus a fixed bank margin. That margin generally ranges from 1.25% to 2.5% depending on the lender and product. The EIBOR component is repriced periodically - usually every one or three months - so monthly payments can rise or fall as EIBOR moves.

If you hold a variable-rate mortgage in the UAE - whether conventional or Islamic - your monthly payment is directly exposed to EIBOR movements. On a AED 1.6 million loan over 25 years, a one percentage point change in EIBOR shifts your monthly payment by approximately AED 917. That is a material cash-flow impact for an expat managing income in a foreign currency or planning around fixed living costs.\n\nExpats comparing mortgage products should look at both the EIBOR tenor used for repricing and the bank's margin, since the margin is fixed for the life of the product while EIBOR is not. Fixed-rate introductory periods - common in UAE mortgage structures - convert to EIBOR-linked variable rates after the initial term ends, so understanding EIBOR before that switchover date is important. Always verify current rates and product terms directly with your lender or on the CBUAE official rate page.