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Rent or buy?

Compare what renting and buying a home on a mortgage really cost you over the years you plan to stay: fees, interest, rent rises and what the home is worth when you sell.

Your assumptions

Mortgage term (years) Return if invested instead % Rent rise a year % Home price change a year % Service charges a year AED Maintenance a year %

Price change can be negative. Service charges are often quoted per square foot: multiply by the home's size. Maintenance is a share of the home's value.

Buying and renting fees

Transfer / registration fee % of the price Mortgage registration % of the loan Agent commission (buying) % of the price, + 5% VAT Bank arrangement fee % of the loan, + 5% VAT Fixed fees AED trustee, title deed, valuation, admin Costs to sell at the end % of the sale price (agent + VAT) Agent fee (renting) % of one year's rent, + 5% VAT, once Contract registration AED each year Security deposit % of yearly rent, returned at the end

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How the comparison works

Renting

All the rent you pay, rising each year, plus the agent fee and contract registration. The deposit comes back, but it could have earned a return meanwhile.

Buying

The money that does not come back: buying fees, mortgage interest, service charges, maintenance, selling costs, and what your down payment and fees could have earned if invested. Any rise in the home's price is taken off; a fall is added.

Why the years matter

Buying costs a lot on day one: in Dubai the transfer fee alone is 4% of the price. Those fees are spread over the years you stay, so a short stay usually favours renting.

Same on both sides

Some costs apply whether you rent or own, such as utilities. In Dubai the municipality housing fee for expats is 5% of the rent, or of the home's rental value for owners who live in it, so it is left out.

A simplified model, not financial advice. All numbers are estimates: it ignores taxes, insurance, the monthly money you could invest when one option is cheaper, and changes in rates. Check the real fees with your bank and the land department before you decide.

Sources: Central Bank of the UAE, Regulations Regarding Mortgage Loans (Circular 31/2013 as amended), CBUAE Rulebook (rulebook.centralbank.ae): maximum loan-to-value for a first home of AED 5 million or less is 80% for expatriates and 85% for UAE nationals (70% and 75% above AED 5 million). Dubai Land Department fees as summarised by Dubai property portals: transfer fee 4% of the price; mortgage registration 0.25% of the loan plus about AED 290; trustee office fee AED 4,000 + VAT (AED 2,000 + VAT under AED 500,000); title deed and admin fees; Ejari registration about AED 100 + VAT and small knowledge and innovation fees. Abu Dhabi: Executive Council Resolution No. 49 of 2018 and the Abu Dhabi municipalities' schedule of real estate fees: sale registration 2% of the value (split between buyer and seller unless agreed otherwise; this tool charges it to the buyer), mortgage registration 0.1%. Market practice, not set by law: agent commission about 2% + VAT when buying and 5% of the yearly rent when renting, bank arrangement fees up to 1% of the loan + VAT, valuation about AED 2,500 to 3,500 + VAT, security deposit usually 5% of the rent unfurnished. Dubai Municipality housing fee: 5% of the rent or rental value, UAE nationals exempt. Other emirates: type your own fees. Not financial advice.