Daily Personal Finance Insights – Transforming values

Daily Personal Finance Insights – Transforming values
07 February 2013

Banks request lighter Mortgage caps

The UAE’s main banking industry group, The Emirates Banks Association (EBA), has asked the Central Bank for leeway with mortgage caps. The EBA is suggesting a 75% loan-to-value cap on borrowing for expatriates and an 80% cap for UAE citizens. In addition, the EBA also recommended limiting the total loan value up to 7 years’ salary for expats and to 8 years’ salary for UAE nationals. They also requested the maximum repayment period should be set at 25 years, as long as the borrower would still be less than 65 years of age at the last instalment for expats, or 70 years old for UAE nationals.

Money and happiness

The Nobel Prize winner for economics Daniel Kahneman said: “Money may not buy happiness, but lack of it sure leads to misery.” Other scientists would seem to agree with new global research in happiness measures indicating: “It is important to realize that seemingly small changes­ in income do lead to profound increases in happiness.”

Positive values

A survey conducted across the UAE and presented at a recent ‘Action for Happiness’ event in London indicates the UAE has overtaken many advanced countries in positive social values. When asked about the values they experience in their nation, people in the UAE were very positive and indicated strong concern for future generations, respect, community pride, creativity, family, peace, educational opportunities, aesthetics, loyalty, and affordable housing.

The UAE has the second lowest level of cultural dysfunction and negativity of the 18 countries studied.

Education Cost Index

We all know the cost of education is rising in the UAE, however Dubai Statistics Center announced that the Education Cost Index (ECI) in the Emirate of Dubai had actually reduced by (-1%) in 2012 compared to 2011. The Education Cost Index is affected by the inflation index, e.g. wages, rents, maintenance, electricity and Water, and other factors, and should not be confused with the Consumer Price Index. The Education Cost Index (ECI) measures the operating expenses for schools and it differs from the Consumer Price Index for the Education Group (CPI), which measures the change in tuition fees for private tutoring, schools and universities and which increased by an average of 10.53% in 2012. So operating costs are down, but prices are up! 


  • ConsumerWatch

    The number of years salary seems rather high, in other countries you may be able to get 6 years but this is considered excessive, normally 4 years. Another method is to cap the amount an individual (or family) can borrow up to 35% of net income, allowing for other debt and regular payments. 

  • Colin

    It is good to hear that the KHDA have stated: "There will be no increase in private school fees for the 2013-2014 academic year... relying upon the ECI." Which, as indicated above, showed the operation costs of schools to be down. The full release can be read on the Government of Dubai website here...

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