Early settlement is paying off a mortgage in full before the end of its term for example when selling the property or refinancing. Banks usually charge an early settlement fee, which in the UAE is capped by Central Bank rules, so the exact amount should be confirmed with the lender.
Where you’ll see it
You’ll meet early settlement when selling a mortgaged property (the loan must be cleared before transfer) or when switching lenders. The bank issues a settlement figure showing the outstanding balance plus any early settlement charge.
Why it matters
The settlement figure determines how much is needed to clear the loan and release the mortgage. Buyers and sellers in a mortgaged resale must factor it in, because the property cannot transfer free of the charge until it is paid and the bank issues a release.
What it is not
Early settlement is not a normal monthly repayment, it clears the whole balance at once. It is also not the mortgage release fee charged by the DLD to remove the registered mortgage; that is a separate cost.
Example
A seller with a home loan requests a settlement figure; the buyer’s funds clear it, the bank issues a mortgage release, and the property transfers free of the charge.
Connected documents and parties
Settlement letter, mortgage release, completion statement; borrower, bank, buyer, DLD.
Going deeper: related reading: mortgage release fee and refinancing.
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Last reviewed: June 2026