EIBOR
Emirates Interbank Offered Rate
EIBOR: The benchmark UAE interbank lending rate used to price variable-rate UAE mortgages.
What is EIBOR?
The Emirates Interbank Offered Rate (EIBOR) is the average rate at which major UAE banks lend AED to each other. Published daily by the Central Bank of the UAE (CBUAE), EIBOR comes in several tenors (1-month, 3-month, 6-month, 12-month), with 3-month EIBOR being the most widely used as a benchmark for UAE variable-rate mortgages. A typical UAE variable-rate mortgage is priced as "EIBOR 3M + 1.5–2.5%" margin, so the all-in rate floats as EIBOR moves. EIBOR closely tracks USD rates (because the AED is pegged to the USD at 3.6725) and tends to move within ~25 bps of comparable USD benchmarks. Mortgage borrowers who choose variable rates benefit when EIBOR falls but pay more when it rises. Fixed-rate periods (1, 3, or 5 years) lock in a single rate before the loan converts to variable.
Example
A UAE expat takes a 25-year mortgage at "EIBOR 3M + 2.0%". If EIBOR 3M is 3.5%, the mortgage rate is 5.5%. If EIBOR rises to 4.0%, the mortgage rate becomes 6.0% on the next reset.
FAQ — EIBOR
How often does my variable-rate mortgage reset to current EIBOR?+
Most UAE mortgages reset every 3 months (aligned with 3M EIBOR), some every 6 months. Your loan documents specify the reset frequency.
Is EIBOR the same as the federal funds rate?+
No — they're different rates in different markets. However, since the AED is pegged to the USD, EIBOR closely tracks USD interbank rates (SOFR) and moves in lockstep with Fed policy decisions in practice.
Related terms
Last refreshed: 2026-05-26