What Is a Down Payment? Your Complete Guide for Buying Property in the UAE

Buying property in the UAE is an exciting milestone, but one of the biggest financial steps you’ll need to prepare for is the down payment. Whether you’re purchasing your first home in Dubai or investing in a property as a non-resident, understanding how a down payment works — and how much you need — is essential to planning your purchase.

This guide explains what a down payment is, how much you’ll need in the UAE, tips for saving, and important rules to be aware of before you start house hunting.

What Is a Down Payment?

A down payment is the upfront amount of money you pay towards the purchase of a property, with the rest covered by a mortgage from your bank or lender.

In the UAE, the down payment is usually expressed as a percentage of the property’s value, and it’s paid before your mortgage is finalized. This amount is separate from other buying costs like transfer fees, mortgage registration fees, and valuation fees.

How Much Down Payment Do You Need in the UAE?

The UAE Central Bank sets the minimum down payment requirements for property buyers:

• UAE Residents: Minimum 20% of the property value for properties under AED 5 million (plus associated buying costs).

• Non-Residents: Minimum 25% of the property value.

• For properties over AED 5 million, the percentage may be higher — typically 30% or more.

For example, if you are a resident buying a property worth AED 2 million, you’ll need at least AED 400,000 for the down payment, excluding other fees.

Why Is a Down Payment Important?

Your down payment affects:

1. Mortgage Approval: Lenders require proof that you can afford the initial payment and still manage your future mortgage installments.

2. Monthly Payments: The more you pay upfront, the smaller your loan amount — and the lower your monthly repayments.

3. Loan-to-Value (LTV) Ratio: This is the percentage of the property’s value that the bank will finance. A larger down payment reduces your LTV and may get you better mortgage terms.

Other Costs to Consider

In addition to your down payment, budget for:

• Dubai Land Department (DLD) Transfer Fee: 4% of the property price + admin fee.

• Mortgage Registration Fee: 0.25% of the loan amount + AED 290 admin fee.

• Bank Valuation Fee: AED 2,500 – AED 3,500.

• Real Estate Agent Commission: Usually 2% of the purchase price.

• Property Registration & Trustee Fees.

These costs can add up to an additional 6–7% of the property’s price.

How to Save for a Down Payment in the UAE

Saving for a down payment may feel challenging, but with the right approach, it’s achievable. Here are proven strategies:

1. Set a Clear Goal

Work out the exact amount you’ll need based on your target property price, and include extra for fees.

2. Open a Dedicated Savings Account

Keeping your down payment funds separate from your everyday spending helps you stay on track.

3. Automate Your Savings

Set up an automatic transfer to your savings account right after payday.

4. Reduce Unnecessary Expenses

Cut back on non-essential spending and redirect that money to your down payment savings.

5. Consider Investments

Low-risk investment options such as fixed deposits or money market funds can help your savings grow faster, but always assess the risks before investing.

Can You Use Personal Loans for a Down Payment?

While some buyers consider taking a personal loan to cover part of their down payment, this approach can be risky. Banks assess your total debt when approving a mortgage, so having an existing loan may reduce your eligibility or increase your interest rate. In most cases, lenders prefer the down payment to come from your own savings.

Tips for Non-Residents

If you’re a non-resident buying in Dubai:

• -Expect to pay at least 25% of the property price as a down payment.
  
  
• -Some banks may require proof of income, credit history, and employment in your home country.
  
  
• -Mortgage interest rates for non-residents are often slightly higher than for residents.
  
  
• -Work with a mortgage broker like Mortgage Finder to help you compare lenders and secure the best deal.
  

Key Takeaways

• -Down payment = upfront amount you pay before getting a mortgage.
  
  

• -Plan for an additional 6–7% in buying costs.
  
  
• -Start saving early and consider professional mortgage advice to guide you through the process.
  
  
  -UAE residents need at least 20%, while non-residents need 25% or more.
  
  

Start Your Property Journey with Mortgage Finder

At Mortgage Finder, we help residents and non-residents secure the best mortgage rates in the UAE. Our team guides you through every step — from understanding your down payment requirements to finalizing your mortgage approval.

Contact us today to get a free consultation and start your path to owning property in the UAE.

---

Calculate your down payment here.

Start the search for your dream home here.

---