This could be good news for property developers, some of whom are scheduled to release thousands of finished property units into the UAE market this year. After maintaining high mortgage rates for more than a year, banks and finance companies in the UAE are finally reducing their home loan rates.

The banks are relaxing their lending criteria, a move that is expected to broaden the buyers' base and boost the sagging fortunes of the country's real estate sector."Quite a many banks have reduced their charges and increased their loan-to-value ratio [LTV] since the beginning of this year," Dean Biddulph, Senior Mortgage Advisor at Independent Finance, a Dubai-based company providing financial services, told .

Market dynamics have changed during the past year. In response to the changing economic climate, lenders and borrowers focus on low-risk investments with completed properties remaining the first choice for both lenders and borrowers. The profiles of borrowers change as more end-users become active in the market.A number of lenders have slashed mortgage rates for new and existing clients.Amlak, one of the largest Islamic mortgage providers, has reduced its profit rate to 6.9 per cent for some its existing clients. Standard Chartered Bank UAE, HSBC Home Finance, Barclays UAE to reduce the mortgage rates.