Mortgages in Qatar are still a relatively new phenomenon for ex-pats, although more banks are beginning to offer home loans to foreigners as the state’s ex-pat population increases. Here’s everything you need to know.
The mortgage system in Qatar can be complicated, with rules in place on how much foreigners can borrow and affordability criteria varying between banks. This helpful guide to mortgages in Qatar includes the following information:
- Mortgages in Qatar
- Should you buy property in Qatar?
- Who can get a mortgage in Qatar?
- Types of mortgages in Qatar
- Mortgage rates in Qatar
- How much can you borrow for a Qatari mortgage?
- How to apply for a mortgage in Qatar
- Mortgage costs in Qatar
- Property insurance in Qatar
- Mortgage repayments in Qatar
- Refinancing a mortgage in Qatar
- Useful resources
Mortgages in Qatar
Ex-pats have been allowed to buy properties in Qatar for the last 15 years, although uptake in the mortgage market has been slow.
However, this could be set to change with preferential residency rules on offer for foreign buyers who purchase homes in the country.
Qatar’s Central Bank sets strict laws on mortgage lending, with ex-pat borrowers allowed to spend a maximum of 50% of their monthly salary on mortgage payments; and mortgage terms of more than 20 years outlawed.
In addition, ex-pats can only borrow up to 70% of a property’s value; this means you will need a significant deposit to get on to the Qatar property ladder.
Should you buy property in Qatar?
Whether you should buy or rent in Qatar largely depends on how long you plan to live in the country. Finding the ideal home for you and your family and finding the right neighborhood to live in are also relevant factors.
Ex-pats looking to stay more than five years or secure permanent residence in Qatar might find buying a home a solid long-term investment. The property market has slowed over the last couple of years. However, real estate experts believe house prices could increase significantly ahead of the state hosting the 2022 FIFA World Cup.
Escape the most common mistakes made by ex-pat homebuyers
Are ex-pats allowed to buy property in Qatar?
Ex-pats have been allowed to purchase properties in Qatar since 2004, albeit with restrictions. First of all, foreign buyers can only purchase homes in a specific set of freehold and leasehold developments around the country.
Leasehold properties are usually available with a 99-year lease, which can be extended for a further 99 years and transferred to any heirs. There are currently 18 designated leasehold developments that are available to foreign purchasers.
Lusail City and Al Khor are among the more budget-friendly options; meanwhile, Onazia and West Bay Lagoon offer more luxury properties with higher prices.
Previously, the residency status for ex-pats was linked to job status. However, the Qatari government has moved to encourage longer-term foreign investment in property.
Since 2018, ex-pats have been able to gain a residency card by buying a property worth at least QAR 728,000.
Despite this, data from the sharia-compliant Al Rayan Bank shows that British ex-pats working in Qatar are increasingly buying properties back in the UK, with nearly a fifth of the bank’s ex-pat customers based in the state.
Buying off-plan in Qatar
It is common for ex-pats to buy brand new properties in Qatar, and off-plan purchases are the norm. Buying off-plan comes with risks for both the buyer and borrower, such as delays in construction and hidden costs.
For instance, developers will often levy service charges for maintenance of the apartment block and amenities such as car parking spaces. Therefore, it is important to get everything in writing before agreeing on a purchase.
When buying a home in Qatar, you won’t need to pay any property taxes, although a transfer fee of 0.25% of the property’s value is levied.
Who can get a mortgage in Qatar?
Ex-pats can take out a mortgage in Qatar with an international or local bank. However, options in the former category can be limited.
This is because new laws introduced in 2016 mean that European lenders must now factor in the possibility of currencies fluctuating when they assess applications.
This change has led to some Qatari banks abandoning borrowers in countries with less common currencies.
Types of mortgages in Qatar
It is possible to get both fixed and variable-rate mortgages in Qatar.
Some deals will charge a set amount for the whole term of the loan, while others offer a cheaper introductory rate for a set number of months or years, after which the rate will become variable.
For example, the Commercial Bank of Qatar offers a reduced rate for the first 18 months of some of its mortgages, after which a variable rate kicks in for the remainder of the term.
Development-exclusive mortgages in Qatar
Some property developers in Qatar have exclusive agreements with banks. This means that you might only have one choice of the lender from which to apply for a mortgage depending on where you are buying a home.
There can be some upsides, however. For example, these exclusive deals sometimes come with incentives for buyers so that you might benefit from a cheaper rate.
Green mortgages in Qatar
Doha Bank recently launched Qatar’s first ‘green’ mortgages, which offer preferential rates on homes certified as energy-efficient.
As well as offering a lower rate, these deals also include zero management fees, complimentary fire insurance, and a free credit card.
Mortgage rates in Qatar
Non-residents taking out mortgages in Qatar will usually need a 30% deposit. The rate you will get depends on how much you are borrowing, your income, and the size of your deposit.
- Doha Bank: mortgages are available for ex-pats aged 21-65, subject to minimum earnings of QAR 15,000 a month. 20-year maximum mortgage terms apply, and rates start at 2.86%;
- Qatar Islamic Bank (QIB): offers loans to ex-pats with an income of at least QAR 10,000 a month. Sets a maximum age limit of 60, and mortgage repayments can’t be more than 50% of the borrower’s salary;
- Qatar National Bank (QNB): requires a minimum income of QAR 15,000, and the borrower must be a maximum of 60 years old at the end date of the loan. Rates start at 2.68%;
- Ahlibank: ex-pats can borrow from QAR 400,000 on terms of up to 20 years.
Commercial Bank of Qatar and HSBC are among the other major lenders who offer loans to ex-pats in Qatar.
How much can you borrow for a Qatari mortgage?
Although some lenders are expat-friendly, they will still limit how many foreign buyers can borrow.
For example, Qatar National Bank allows locals to take out loans of up to QAR 12.5 million, while ex-pats can only borrow QAR 3 million.
Doha Bank, meanwhile, sets limits of QAR 5 million and QAR 4 million, respectively.
Banks take the following factors into account when considering how much to lend you:
- Value of the property;
- The ability of the borrower to repay the loan;
- Borrower’s employment history and job stability;
- The borrower’s monthly income
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