How much cash you need to buy a Dubai home: Costs, mortgages, payment plans explained

As more residents consider shifting from renting to owning, real estate experts say young buyers often underestimate the upfront cash needed to enter the UAE property market and the fees that cannot be financed through a mortgage.

“In most cases, a buyer should have between 25 to 30 per cent of the property value ready in cash,” said Ismail Al Hammadi, Founder & CEO of IAH Group. “That includes the down payment — typically 20 per cent for expats, and 15 per cent for Emiratis — as well as the related costs like DLD fees, agent commission, valuation, and registration.”

For a property worth Dh1 million, this means a buyer would need “roughly Dh250,000 to start comfortably,” he added.

Experts agree that despite easing interest rates and longer repayment periods, the biggest challenge is still the upfront cost.

Navneet Mandhani, Founder of Karma Developers, said the “four per cent Dubai Land Department fee and roughly two per cent agency fee” must be paid in cash. 

“Even though mortgage rates have eased and tenures can stretch up to 25 years, this initial outlay remains an obstacle,” he noted.

Income verification and credit history can also slow approvals for younger buyers.

“Yes, young buyers often encounter hurdles when securing mortgages, primarily due to stringent lending criteria related to income verification and credit history,” said Yogesh Bulchandani, CEO & Founder of eSunrise Capital. However, he added that many are navigating these challenges through better financial literacy and a more favourable lending environment.

Flexible payment plans

To ease entry barriers, developers are rolling out increasingly creative payment structures aimed directly at first-time younger buyers.

Mandhani said common plans now include:

• 60/40 or 70/30 during construction
• Post-handover plans spreading 20–40 per cent over 2–5 years
• Reduced booking/down payments of 5–10 per cent
• Rent-to-own options, depending on developer track record and escrow protections

Al Hammadi said this shift is a major reason for the surge in young buyers. “Developers have become much more creative with their payment structures. Some are offering post-handover plans that can go up to a 5-year period, while there are others that have reduced upfront payments to as low as 10 per cent.”

Bulchandani said developers are increasingly tailoring plans for younger buyers. “Developers are increasingly recognising the needs of young buyers and are offering innovative payment plans and reduced down-payment options.”

Bulchandani noted that young UAE citizens also benefit from national housing loans and assistance programmes, which help them access property earlier in life. He added that both citizens and expatriates can tap into loans from UAE banks “with financing options tailored for expatriates and foreign investors”.

Understanding costs

Buying a home in Dubai remains financially achievable for young residents but only with a clear understanding of upfront costs, mortgage criteria, and payment plans.

As Mandhani summed it up: “The initial 26 per cent is the key commitment, making long-term ownership more manageable.”

Source: https://www.khaleejtimes.com/