The mortgage rates in Dubai and UAE increased remarkably in the past few months. This happened because the banks in Dubai and UAE were playing safe to lend the properties and they tightened their lending criteria. This caused the mortgage market to decline.

Recent reports from the real estate market of Dubai show that the banks have now taken a step to reduce the mortgage rates. HSBC one of the largest international banks present in Dubai has recently announced to cut off their mortgage rates. It announced to cut down the rates for new mortgage customers from 8.5% to 6.75%. According to HSBC officials customers depositing 25% of the mortgage amount can take advantage of the revised rates. The Premier Customers will receive a further reduction of 0.5% whereas the HSBC Status customers will receive a reduction of 0.25%. The rates for the mortgage customers will be revised on 1st April 2010.

This step by HSBC Bank is supposed to make other banks cut off their mortgage rates as well. According to the Central Bank of UAE other banks are also looking forward to cut down the mortgage rates and soon their will be a boom in the declining mortgage market of UAE and Dubai.

Experts in the real estate market of Dubai say that Dubai has a potential to attract the international banks as it is a global city and its population is increasing day by day. Currently there are 1.4 million citizens in Dubai and by the end of 2010 the population rate is wished to reach 3.5 million because more and more multinational companies will move in Dubai and with them their employees and all will need a place to live. The future of international banks in Dubai is bright and the banks do not want to lose the opportunity to cash the Dubai mortgage market. The current demand and supply gap will be leveled soon. Therefore, the mortgages in Dubai are good for the banks.