The Numbers You Actually Need (Updated May 2026)
Here are the current EIBOR rates as published by the Central Bank of the UAE (value date: 1 May 2026):
| Tenor | Rate |
| Overnight | 3.444% |
| 1 Week | 3.694% |
| 1 Month | 3.678% |
| 3 Months | 3.759% |
| 6 Months | 3.740% |
| 12 Months | 3.984% |
CBUAE Base Rate: 3.650% | DONIA: 3.663%
Source: Central Bank of the UAE (CBUAE). Rates published on a T+2 basis — the 1 May 2026 fixing applies from 3 May 2026.
What Is EIBOR and Why Does It Affect You?
EIBOR — the Emirates Interbank Offered Rate — is the benchmark interest rate at which UAE banks lend unsecured funds to one another in UAE Dirhams. Published daily by the Central Bank of the UAE, it is calculated by averaging contributions from a panel of nine banks, stripping out the two highest and two lowest submissions.
For most UAE mortgage holders, EIBOR is the number that actually moves your monthly payment. Variable-rate home loans are typically priced as EIBOR + a bank margin (usually 1.0%–1.5%). The 3-month tenor is the most widely referenced benchmark for retail mortgages.
Where Are Rates Now vs. a Year Ago?
To put May 2026 in context:
- All-time high: 5.300% (3M EIBOR, January 2024)
- 12 months ago (May 2025): Overnight EIBOR was around 4.13%
- Today (May 2026): 3M EIBOR sits at 3.759% — roughly 140 basis points below the 2024 peak
The aggressive rate-cutting cycle that began in late 2025 has slowed materially. The market has entered what analysts are calling a “stabilization phase.” The rapid downward trend has plateaued, and 3M EIBOR has even seen a slight uptick heading into May.
What this means for borrowers: The window for locking in near-cycle-low rates may be narrowing. Those on variable-rate mortgages should watch the next CBUAE Base Rate decision closely.
Fixed vs. Variable: The May 2026 Decision
Current best fixed mortgage rates (2-year introductory) start from 3.79% — barely above the 3-month EIBOR of 3.759%. By contrast, variable rate products currently run at ~5.25%+ when fully loaded.
For the vast majority of buyers, a 2–3 year fixed rate makes more sense right now:
- Choose Fixed if you want payment certainty and plan to hold the property beyond 12 months. Rates at 3.79%–3.85% are historically very low for the UAE market.
- Choose Variable only if you are confident you will pay off the loan in full within the next 12 months and can absorb rate movements.
What Drives EIBOR? Key Factors to Watch
EIBOR is closely linked to US Federal Reserve policy because the UAE Dirham is pegged to the US Dollar. When the Fed raises or cuts rates, the CBUAE typically follows.
Watch these signals:
- US Federal Reserve decisions — the primary driver of EIBOR direction
- CBUAE Base Rate announcements — UAE monetary policy response
- Global oil prices — affect UAE fiscal position and liquidity
- UAE GDP growth — strong growth can support higher rates for longer
Should You Refinance Right Now?
If your current mortgage rate is 4.75% or higher, switching to a May 2026 rate of 3.79% could save approximately AED 1,100 per month on a AED 1.5M loan.
Before moving, check:
- Early settlement fee: Most banks cap this at 1% or AED 10,000 (whichever is lower). Confirm yours.
- Valuation fee: Some banks (FAB, ADCB) are currently waiving the ~AED 3,000 valuation fee.
- Break-even point: Divide your total switching cost by your monthly saving. If the break-even is under 18 months, refinancing is worth serious consideration.
Month-on-Month EIBOR Trend (2025–2026)
| Period | 3M EIBOR (approx.) |
| Jan 2024 (peak) | 5.300% |
| Dec 2024 | ~4.80% |
| Mar 2025 | ~4.40% |
| Jun 2025 | ~4.10% |
| Sep 2025 | ~3.95% |
| Dec 2025 | ~3.85% |
| May 2026 | 3.759% |
The trend is clear: rates are meaningfully lower than 18 months ago, but the pace of decline has slowed significantly.
Bottom Line
May 2026 is a pivotal month for UAE mortgage holders. EIBOR has fallen substantially from its 2024 highs, but the easy gains are largely behind us. If you are:
- On a variable rate: Run the refinance numbers now.
- Buying: A 2–3 year fixed rate at ~3.79% locks in a historically attractive entry point.
- Waiting for rates to fall further: Be cautious — the stabilization phase suggests the next meaningful move could go either way.
Rates are published by the CBUAE daily at centralbank.ae. This post is updated monthly. Always consult your bank or a licensed mortgage broker before making financing decisions