EIBOR (Emirates Interbank Offered Rate)
The benchmark interest rate at which UAE banks lend to each other, used as the base for variable-rate mortgages.
What is EIBOR (Emirates Interbank Offered Rate)?
EIBOR stands for Emirates Interbank Offered Rate — the rate at which banks in the UAE lend money to each other. It serves as the benchmark for variable-rate mortgages in the UAE, similar to LIBOR internationally. Variable mortgage rates are quoted as EIBOR plus a margin (e.g., 3-month EIBOR + 1.99%). EIBOR fluctuates based on global interest rate trends, particularly following the US Federal Reserve's rate decisions, because the UAE dirham is pegged to the US dollar.
EIBOR (Emirates Interbank Offered Rate) in the UAE
The UAE Central Bank publishes EIBOR rates daily for 1-week, 1-month, 3-month, 6-month, and 12-month tenors. Most UAE mortgage products reference the 3-month EIBOR. As of 2025, EIBOR rates have been trending downward from their 2023-24 peaks, creating refinancing opportunities for existing borrowers.
Worked Example
Your mortgage rate is 3-month EIBOR + 1.99%. If 3-month EIBOR is 4.5%, your effective rate is 6.49%. If EIBOR drops to 3.5%, your rate becomes 5.49%, saving you approximately AED 1,200/month on a AED 2M loan over 25 years.
How often does EIBOR change?
EIBOR is published daily but typically changes gradually. Banks review your mortgage rate quarterly or annually based on the EIBOR tenor specified in your agreement.
Should I choose EIBOR-linked or fixed rate?
It depends on your risk tolerance and market outlook. EIBOR-linked rates can save money when rates are falling but cost more when rates rise. Mortigo can model both scenarios for you.