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How to save money for a house down payment in Dubai

Real Estate, News, Dubai Real Estate, Best Real Estate


Owning a house in Dubai is a dream that, for many, seems unreachable due to high down payment amounts. That’s exactly is why we’re bringing you this list of 10 handy tips on saving money for a down payment in Dubai. Follow these steps and you’ll soon be ready to buy that house you’ve always wanted.

WHAT IS THE MINIMUM DOWN PAYMENT ON A HOUSE IN DUBAI?

The minimum down payment on a house in Dubai is 25% for ex-pats and 20% for locals. That means that if the price of the home you’ve got your eye on is AED 1M, the money you’ll need to put up front is AED 250,000 (for ex-pats) and AED 200,000 (for Emirati). That’s a lot of dough! The good news? There’s a broad range of affordable properties in the emirate and once you put your mind to it, you’ll have the cash saved and be ready to wave goodbye to a renter’s life.

TIPS ON SAVING FOR A HOUSE DOWN PAYMENT IN DUBAI

Here are some tricks and tips on how to save for a down payment on a house in Dubai:

1. CALCULATE YOUR HOUSE DOWN PAYMENT WITH BAYUT’S MORTGAGE CALCULATOR DUBAI


The first step to saving for a house down payment in Dubai is to know how much money you will actually need to purchase the property.
When browsing properties for sale in Dubai on Bayut, pay attention to the mortgage calculator embedded on the property’s listing page. It is known to be the best mortgage calculator in Dubai. The tool can very quickly and easily help you ascertain how much money you’ll need to save for your property’s deposit. Pull the green bars left and right and let the calculator do all the math.
You can also pay a visit to a mortgage lender, see a Mortgage Consultant in a reputable agency, or get tips from our piece on how to get a mortgage in Dubai for Expats for general FAQs on the subject. You can even find out if you qualify for a mortgage and get an instant online pre-approval using the Bayut ADCB Dream Home platform. You can look for the desired property, enter your personal details and instantly determine whether you qualify for a mortgage.

2. DETERMINE A TIME FRAME

Once you know your exact down payment value, you’ll need to determine a time frame to save the amount. You will be building your entire savings plan based on these numbers. Here’s what these calculations might look like:
    1.Five years: AED 220.80 per day
    2.Ten years: AED 110.40 per day
Once you have these options, work out which time frame is more feasible for you.


3. PAY YOUR CREDIT CARDS OFF

If you wish to get out of the tenancy cycle once and for all, you do not want to have several credit cards chipping away at your monthly income. This is amongst the most integral steps to saving for a house down payment in Dubai. Make yourself debt-free as much as you can and focus on the future for your exciting first-time home purchase.
If your debts are high, at least try to minimize the number of credit cards. Alternatively, try setting up lower interest rates, and try spending as much as your pocket allows you to. Don’t go over your monthly budget and try to pay those cards off before they start claiming lots of interest every month!

4. OPEN UP A SAVINGS ACCOUNT

If you want to know how to save money in Dubai, start with a savings account. Opening up a savings account with Emirates NBD and most other banks in Dubai is as simple as possible, yet it makes all the difference. While you won’t exactly be getting interested in your savings as you might in your native country, you’ll at least be able to mentally separate your down payment fund from your everyday spending money.

5. SET UP AN AUTOMATED PAYMENT PLAN

Further to our previous point, our minds can easily trick us into believing that the multiple zeroes in our bank account mean we’ve got money to spare. Setting up an automated savings plan is all about removing the temptation out of the equation.
If a certain percentage of your salary gets transferred to your savings account invisibly, you won’t be able to go on a spur-of-the-moment diving trip in Fujairah or splurge on a second pair of Manolo Blahnik’s. All in all, it will make saving for a down payment a whole lot easier.



6. START BUDGETING

In our fast-moving computer age, the one thing you can do quickly is to calculate what your monthly expenses are versus how much you ought to be spending. Whether it’s a simple spreadsheet or the superb Goodbudget app, you can have a detailed view of your rent, utilities, car, and other payments with you at all times and easily ascertain how much over budget you’ve gone.

7. CUT DOWN ON ALL NEEDLESS EXPENSES

Are you still paying for Netflix while you never really have the time to watch TV? Is your shirt pressing AED 4 a pop when there’s an AED 2 alternative just a few streets down the road? There are many options for cost-cutting when you live in a market that is as competitive as Dubai. Again, do a bit of research and find the most affordable options.
Let’s have an example. It may be difficult to save up for a down payment on a house in Dubai if you spend over AED 1,000 on lunches each month (it equates to AED 11,550 yearly, presuming you’ve got a month off as per UAE law).

8. RENT A CHEAPER APARTMENT

Yes, we all want to lead a comfortable life. But the truth is – if you want to experience the feeling of walking into your very own home, your total housing costs should never exceed 30% of your monthly income. So, if you want to live in a high-end community like Dubai Marina, yet you still wish to save for a down payment – you might need to recalculate. Do your research on Bayut, and you’re bound to find a similar property for a lot less.

9. START SAVING ON UTILITY BILLS

Yes, it might look like we’re pushing it with this one and asking you to become an altogether different person. But the truth is – if you rationalize your AC use, buy cost-efficient devices and follow our other budgeting suggestions for utilities in Dubai, you’ll save a ton in the long run. It is a cliché, but if you want to be saving for a house down payment in Dubai, you’ve got to be a bit on the conservative side. So, here it is: A dollar saved is a dollar earned.

10. TAKE MONEY FROM WHERE IT COMES

Lastly, the more you make, the sooner you’ll get to experience the spectacular feeling of walking into your own house. Whether it’s selling your old furniture or your old clothes, always be enlarging your monthly income somehow – even if it’s only by a few hundred dirhams.

Source: Bayut