KFS Mortgage Loan

Mortgage Loan Individuals – Variable Interest Rate

A Home Loan is intended to fulfil your desired dream home. This product follows an installment payment structure.

KFS provides you with indicative IMPORTANT information about the commercial terms applicable to Al Khaliji France S.A Home Loans including interest, fees and charges of this product.

We kindly request you to carefully read and understand the document, if you are considering applying for a Mortgage Loan from Al Khaliji S.A France.

By signing this KFS document, you consent that you have read and understood the Mortgage Loan features and benefits.

For More detailed information, please refer to the facility offer letter or visit AKF website at www.alkhaliji.ae

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Key Product Details

Loan Type

Mortgage Loan

Nationalities Allowed

UAE Nationals and Expatriates with valid UAE residency permits.

Type of Properties Allowed

Properties where clear title is available at the Lands or Registration Department.
Under construction / off plan properties not allowed.

Minimum Income / Month

AED 25,000/- of at least one borrower.

Minimum Loan Amount

AED 500,000/-

Maximum Loan Amount

AED 15 million but
1. Not exceeding 8 times annual income
2. Not exceeding 50% DBR

Max Loan Tenure

25 years

Max LTV

UAE Nationals:

First House Not applicable
Second & Subsequent House or Investment Property: 65% of the value of property, regardless of the value.

Expatriates:

First House/Owner Occupier:

a) Value of Property less or equal to AED 5M - Max 75% of the value of property.
b) Value of Property more than AED 5M – Max 65% of the value of property.

Second & Subsequent House or Investment Property: 60% of the value of property, regardless of the value

Maximum Loan To Value (LTV) allowed for a Mortgage Loan is based on regulation/rules laid down by competent authorities and is subject to change from time to time.

Debt Burden Ratio

Limited to 50% of income.

Loan Repayment

The Customer is required to make repayment as per the agreed schedule.
Loan repayment is in Equated Monthly Installment (EMI).
EMI of AED 5,590/- for full loan period. Variable rate loan may vary based on the EIBOR rate.

Annualized Interest Rate (AIR)

Annualized Interest rate is calculated based on individual profile such as monthly salary, employer, loan amount, existing debt and other credit parameters.
AIR is subject to be revision from time to time.
Interest rate is variable linked to Emirates Interbank Offered Rate (EIBOR) (i.e. EIBOR + fixed margin).

Interest is calculated daily and charged monthly using the following formula:
Outstanding Principal Balance x Interest rate x (1/360) for one day (as we follow 30/360 Basis)

Variable interest rate is linked to EIBOR (The Emirates Interbank Offered Rate) i.e. EIBOR + Fixed Margin.

Variable rate linked to 1-month, 3-month or 6 months will be reviewed monthly, quarterly or half-yearly as per the option selected by you.

Equated Monthly Installment (EMI)

EMI is calculated by adding the principal loan amount and total interest and dividing this total by the loan period in months. This is done using reducing balance method which means that as your loan balance reduces, with every Equated Monthly Installment (EMI) payment, the interest portion of your EMI will reduce.
The Equated monthly installment (EMI) will change depending on the actual EIBOR rate on the review date.

ILLUSTRATION : Total Repayments (AED)**

a. Personal Loan Amount	1,000,000/-
b. Interest Rate	5%*
c. Tenure	300 months (25 years)
d. Interest Amount	682,314/-
e. Total Repayment Amount (a)+(d)	1,682,314/-
f. EMI	5,608/-

Interest Rate Calculation:

Total repayment amount = Principal + Interest
Interest amount = Principal x Interest Rate x Tenure
EMI = Total repayment amount / Tenure (months)

*If the 1-month EIBOR is 3% on the review date, then the revised interest rate will be 5.0% (3% + 2% Fixed Margin)

**Variable Interest rate of 5 % is equivalent to flat rate of 2.729 % (conversion factor 1.832)

This calculation is tentative and may vary depending on the loan terms and the Bank’s policies.

APR (Annual Percentage Rate)

APR is the annual percentage rate which is inclusive of the annual interest rate (based on the reducing balance basis), in addition to the processing fees and insurance premium (if applicable) based on maximum tenure permissible for the product.
Example: As per Illustration reducing interest rate to be assumed at 5.0% p.a. (1M EIBOR + Fixed Margin) + amortized processing fees (1%+VAT over average life of tenure)

Impact on EMI if EIBOR Changes

If 1-Month EIBOR is	EMI
3.25%	AED 5,721/-
3.50%	AED 5,835/-

Scenario 1: 1 Month EIBOR increases to 3.25 % p.a.
If 1-month EIBOR increases to 3.25 % on review date then revised interest rate will be 5.25% (3.25 % + 2 % fixed margin)
Interest amount: Principal X Interest X Tenure =1,000,000 x 2.865% x 25 =716,430
Total repayment = Principal + Interest = AED 1,716,430
EMI = Total Repayment / Tenure =1,716,430 /300 = AED 5,721

Scenario 2: 1 Month EIBOR increases to 3.50 % p.a.
If 1-month EIBOR increases to 3.50 % on review date then revised interest rate will be 5.50% (3.50 % + 2 % fixed margin)
Interest amount: Principal X Interest X Tenure = 1,000,000 x 3.002% x 25 =750,545
Total repayment = Principal + Interest = AED 1,750,545
EMI = Total Repayment / Tenure =1,842,000/300 = AED 5,835

Note: Conversion factor applied (1.832) to convert variable rate to flat rate.

Processing Fees

1.00% of the loan amount in addition to a 5% VAT on the applicable fee. This fee is applicable for processing your loan request. This is one time fee and is charged upfront and non-refundable in case you decide to withdraw the application.

Installment Deferment

This fee is charged for any request to postpone / defer a loan payment.
Fee of AED 100 is applicable for installment deferral request in addition to a 5% VAT on the applicable fee:

Early Settlement

Fee of 1.00% of the Settled loan amount: max AED 10,000/- in addition to a 5% VAT on the applicable fee.
This fee is applicable on all early settlement requests
Please refer the Offer Letter for further details on Early Settlement

Partial Payment Fee

Fee of 1.00% of Settled loan amount or AED 10,000/- whichever is lower (in addition to a 5% VAT on the applicable fee).
No more than 2 part payment allowed in a year. Minimum AED 100,000/- or 3 equivalent EMI. Max: 30% of the outstanding amount in a year.
Please refer to the Offer Letter for further details on Partial Settlement Fees.

Loan Re-scheduling Fee

Any loan rescheduling request is subject to a fee of AED 3,000/- in addition to a 5% VAT on the applicable fee This fee is charged for any request to reschedule the loan tenure.
Loan re-scheduling requests are subject to the Bank’s sole discretion.

Late Payment of Installment

Any late payment will be charged when we do not receive monthly repayment from you, in full, on its due date.
Late payment of installments will incur a fee of AED 200 /- in addition to a 5% VAT on the applicable fee:

Important Links

For detailed and latest fees and charges and other product please visit our website www.alkhaliji.ae

Additional Information

The Loan amount consumers are eligible for and interest rate offered may differ from the illustrative example shown above. This depends on the consumers credit profile and affordability assessment of the bank
Bank reserves the right to decline any customer application at its sole discretion
The bank reserves full-unrestricted rights to modify its Terms and conditions offered and revise the rates applied on Fees and Interest Charges at any time by giving a written notice to the customers registered contact details with 60 days prior notice of effecting such charges wherever applicable
All interest charges applicable are calculated from the date of loan disbursal.
In case you fail to fulfil your obligations as per the Terms and Conditions, before and during your relationship with us, there will be consequences including but not limited to penalties
Bank may debit the Customer’s account with any charges, expenses or commission payable against the banking services rendered in accordance with the approved and announced banking charges and commission as notified to the customer from time to time
The Bank will hold security over the property until the loan is repaid in full
The Bank will not charge interest on the accrued interest
The cooling-off period allows you to cancel the product within five (5) business days of signing the application or offer letter and the Bank will not be able to proceed until this period expires, unless you have waived this right. To cancel the application or offer during the cooling period you must provide notice to the bank.
The data privacy prescribes rules and regulations regarding the collection, handling, disclosures and use of personal data in the bank. Kindly visit www.alkhaliji.ae for the details on Privacy Policy of the Bank

Important Notes

If you fail to meet the monthly EMI/repayments on your loan, your account will go into arrears and incur late payment fees.
AKF will report any default or payment delays to Al Etihad Credit Bureau (AECB), which may impact the credit history and credit score of the Customer.
Missing repayments may affect your credit rating and limit your ability to borrow/obtain financing in future.
You have the right to a Cooling-off Period of 5 complete business days at time of signing the contract for the purchase of a Financial Product or Service or any other product regulated by the Central Bank.
Refinancing your loans may take longer to pay off then your previous loan and will result in paying more in interest includes Top-up, Restructuring or Rescheduling.
Breach by the Customer of the AKF Terms and Conditions, applicable to the Customer, available on the AKF website www.alkhaliji.ae or on the Customer’s Application Form, at any point during the Customer relationship with AKF, before or afterwards, as applicable, may lead to wide range of consequences, including but not limited to cancellation of the Customer’s Loan (in such case, all amounts due under a Loan shall become immediately due and payable), suspension of offers and benefits and/or cancellation of the Customer’s relationship with AKF.
Apart from that, AKF may exercise any of its rights stated in the AKF Terms and Conditions, including but not limited to enforcing any applicable Security provided by the Customer or available under the Applicable Laws (If you do not keep up your payments, you may lose your asset).
The Customer remains liable for the outstanding debt after consideration of any proceeds of sale of a collateral and including accrued interest, fees, legal, selling and other related costs.