Tools · Dubai
Rent vs buy calculator
The usual comparison — this month’s rent against this month’s mortgage payment — is the wrong sum, and it is the one almost everybody does. It leaves out the 4% you hand the Land Department on the way in, the commission you pay on the way out, the service charge that arrives every year, and the fact that part of a mortgage payment is not a cost at all but savings. This calculator does the other sum: what each path costs in total over the years you actually plan to stay, and the year at which owning starts to come out ahead.
If you buy
If you rent
The comparison
Year 2
Buying costs less from
Up to year 1, renting is the cheaper path on these figures.
AED 294,757
Buying, over 10 years
Everything paid in, less what selling in year 10 would return.
AED 1,208,957
Renting, over 10 years
Rent, housing fee and letting commission, less what the cash you kept has earned.
AED 914,201
Buying comes out ahead by
The gap at year 10. Change the years you stay and it moves more than anything else here.
Buying starts you AED 415,320 out of pocket — AED 300,000 of deposit and AED 115,320 in fees, none of which can be borrowed — and costs AED 6,670 a month thereafter. The renter is assumed to keep that same AED 415,320 and nothing more.
| Year | Renting has cost | Buying has cost | Difference |
|---|---|---|---|
| 1 | AED 110,250 | AED 181,221 | Renting ahead by AED 70,971 |
| 2 | AED 218,400 | AED 203,529 | Buying ahead by AED 14,871 |
| 3 | AED 329,795 | AED 223,663 | Buying ahead by AED 106,132 |
| 4 | AED 444,531 | AED 241,535 | Buying ahead by AED 202,996 |
| 5 | AED 562,709 | AED 257,057 | Buying ahead by AED 305,652 |
| 6 | AED 684,433 | AED 270,137 | Buying ahead by AED 414,296 |
| 7 | AED 809,809 | AED 280,540 | Buying ahead by AED 529,269 |
| 8 | AED 938,945 | AED 288,076 | Buying ahead by AED 650,869 |
| 9 | AED 1,071,956 | AED 292,852 | Buying ahead by AED 779,104 |
| 10 | AED 1,208,957 | AED 294,757 | Buying ahead by AED 914,201 |
The method
How the two paths are compared
Both people in this comparison start with the same pile of cash — the deposit and the fees a buyer would need on completion day. One spends it and takes on a mortgage; the other keeps it and pays rent. From there the calculator adds up everything each of them pays out year by year, and at the end of the period it settles up: the buyer sells and takes the proceeds, the renter takes whatever the cash has grown into. Whichever path has cost less by then is the cheaper one, and the year the lines cross is the break-even.
This is why a monthly comparison misleads in both directions. Part of a mortgage payment repays the loan, and that part is not spent — it comes back when you sell, so counting the whole payment as a cost overstates buying. But a buyer also pays the transfer fee, the commission, the trustee and the bank’s charges before they own anything, and pays a commission again to sell, so counting only the payment understates it. The costs on the way in and the way out are the reason a Dubai purchase held for a year or two is usually the more expensive path even when the monthly figures say otherwise.
The rate at which prices grow is the single input that decides the answer, and it decides it faster than people expect, because growth is levered by the deposit: put a fifth down and you own all of the property’s movement on a fifth of the money. That cuts both ways, and it is why the calculator will not guess it for you. The defaults set price growth and rent growth to the same figure deliberately — with both equal, the tool takes no view on whether property outruns rents, and the answer is the cost structure alone. Set them both to zero to see the comparison with nothing assumed about the market at all.
The last field is the one most calculators leave out. Money that does not become a deposit does not sit still — or it might, and only you know which. If the cash would be invested, put the return you would expect on it and the renter is credited with the growth; if it would sit in a current account, leave it at zero. It is set to zero to begin with, because assuming a return is a claim about your life and not about Dubai.
The two columns
What each side actually pays
Every cost the calculator counts, on the side that carries it. The Land Department’s figures are regulation; the commissions and the deposits are convention, and are what the market conventionally does rather than what any law requires.
| Cost | If you buy | If you rent |
|---|---|---|
| On the way in | 4% DLD transfer fee, AED 580 title deed, the trustee office’s charge, and conventionally 2% commission plus VAT. Cash, on completion, and none of it can be borrowed. | Conventionally 5% of the annual rent to the agent on a new tenancy, and the Ejari registration. |
| The deposit | At least 20% of the price for an expatriate’s first home under AED 5m, 30% above it. Spent, not held. | Conventionally 5% of the annual rent, or 10% for a furnished home. Held by the landlord and returned at the end. |
| Borrowing | 0.25% of the loan plus AED 290 to register the bank’s charge, the bank’s valuation and arrangement fees, then interest for the life of the loan. | — |
| Every year | The service charge, billed per square foot by the owners association, plus upkeep. The owner’s, never the tenant’s. | The rent, and the 5% housing fee that rides on the DEWA bill in twelve monthly parts. |
| On the way out | Conventionally 2% commission plus VAT to sell, the developer’s no-objection certificate, and an early settlement fee on any mortgage left — capped at 1% of the balance or AED 10,000, whichever is lower. | Notice, and the deposit back less anything the landlord holds against it. |
| At the end | Whatever the property is worth, less what is left on the loan and the cost of selling it. | The cash that was never a deposit, plus whatever it earned. |
- The letting commission is charged once, at the start. A renewal conventionally does not carry one; a move to a different home does, so a renter who moves every two years pays it more often than the calculator assumes.
- An owner who lives in their own home pays a municipality housing fee on the property’s value rather than on a rent. The rate is not one we will state, so it is left out of the buying column — which flatters buying slightly, and is worth knowing.
- Buildings and life insurance on a mortgaged home, the developer’s no-objection certificate, moving costs and furniture are on neither side. They are real and they are small next to the figures above.
- Rent increases are governed by the RERA rental index and need ninety days’ notice, so a sitting tenant’s rent does not move freely. The growth rate here is a long-run assumption, not what a landlord may ask next year.
Every fee a buyer pays, who pays it, and a worked example on two million →
Questions
Renting against buying in Dubai
Is it better to rent or buy in Dubai?
It depends almost entirely on how long you stay. Buying carries about 6% of the price in costs on the way in and another 2% plus VAT on the way out, so a short stay rarely earns that back. Over a longer one the mortgage becomes savings rather than spending and the buyer keeps whatever the property has done. The calculator gives you the crossing point for your own figures rather than a rule of thumb.
How many years do you need to own a Dubai property to break even?
There is no fixed number — it moves with the rent you would otherwise pay, the price, the deposit and what you assume about growth. What is fixed is the shape: the costs of buying and selling are paid whether you stay one year or twenty, so they are spread thinner the longer you hold. Put your own figures in and the calculator names the year.
Can foreigners buy property in Dubai?
Yes, in the designated freehold areas, and you do not need to live here to do it. A foreign national can own the property outright and sell it on. Residents borrow from every major UAE bank; non-residents can borrow too, from a shorter list of lenders and usually with a larger deposit.
How much deposit do I need to buy instead of rent?
The Central Bank sets the floor: 20% for an expatriate’s first home under AED 5 million and 30% above it, 15% and 25% for a UAE national, 35% for a second property and 50% off-plan. On top of the deposit budget a little over 6% of the price in fees, all of it cash on completion day.
Does buying a property in Dubai get me a residence visa?
It can. Property investment is one of the routes to a long-term residence visa, with the threshold set by the government and the conditions attached to mortgaged and off-plan purchases the part that has moved most in recent years. Renting carries no such route.
How much can my rent go up if I keep renting?
Increases are governed by the RERA rental index, which compares your rent to the going rate for similar homes nearby and caps the rise accordingly, and a landlord must give ninety days’ notice of any change. It is a real constraint on the renting column, and it is the reason a long-settled tenant often pays well under the market.
What does it cost to sell a Dubai property?
Conventionally 2% of the price plus VAT to the agent, the developer’s no-objection certificate — commonly AED 500 to AED 5,000, set by the developer — and, if a mortgage is outstanding, an early settlement fee capped by the Central Bank at 1% of the balance or AED 10,000, whichever is lower. The buyer carries the 4% transfer fee.
The two numbers this all turns on are recorded, not guessed: what places actually sold and let for is in the sales reports, community by community and building by building. If you have decided to buy, the mortgage calculator sizes the loan and the cash you need on the day; if you are buying to let rather than to live in, the rental yield calculator works out what it returns. What is on the market today is on Buy and Rent.