HSBC is about to launch a Shariah-compliant, capital-guaranteed note that can be used as security for 5% home loans in the UAE, where typical mortgage rates are as high as 7.5%.

The three-year dirham-denominated Amanah Premium Deposit Plus is a capital guaranteed product linked with 100% participation to a basket of global agriculture, clean energy and healthcare stocks, capped of 27%.

Local commentators say the product is the latest example of how ultra-low US interest rates are finding their way into the UAE housing market, despite reluctance on the part of local providers. Banks and mortgage companies have been reluctant in the past to pass on falling discount rates to home loan customers, arguing that in a sellers' market, with people desperate to secure home funding, there is no incentive to reduce rates.