General
    beginner

    What happens if a property is totally destroyed while under mortgage?

    Ali Faizan Syed1 min read0 viewsUpdated 1/2/2026
    If a mortgaged property is totally destroyed or becomes defective, the mortgage is not extinguished. Instead, the Mortgage is transferred to any substitute property or insurance payout that replaces the original asset. The Mortgagee (the lender) maintains their right to enforce the debt against this substitute asset according to the original rank of the mortgage. This protection ensures that the creditor's security remains intact even if the physical property is lost.

    Related Topics:

    Property Destruction
    Mortgage Security
    Dubai Finance Law
    Was this helpful?

    Need More Clarity?

    Get personalized advice from Ali Faizan Syed, your trusted Dubai real estate consultant.

    WhatsApp ConsultationCall Now

    Related Questions

    Browse Categories

    LegalInvestmentFinancingMarketVisaTaxes