Rent vs Buy Calculator UAE
Renting or Buying?

Compare a home purchase with renting in the UAE

A mortgage instalment is only one part of buying a home. Upfront charges, service charges, maintenance, the time you expect to stay and the price you eventually sell for can all change the comparison. Renting also leaves capital available for other uses. This calculator brings those assumptions together in one nominal AED model.

How to use the calculator

Enter the property price, down-payment percentage, quoted annual mortgage rate and loan term. Add the annual rent for a comparable home and your intended holding period. Then replace the example fees, ownership costs and growth assumptions with your own estimates. A down payment of 100% represents a cash purchase. Set the mortgage rate to 0% to test an interest-free loan.

Include all relevant buying and selling charges

The upfront buying-cost input is a combined percentage of the property price, excluding the down payment. Include the charges you expect to pay for transfer or registration, the agent, bank arrangement, valuation, mortgage registration and other purchase administration. Convert fixed AED charges into a percentage by dividing their total by the purchase price and multiplying by 100. Do not add the same charge twice.

For Dubai, consult Dubai Land Department’s fee schedule and obtain current quotes for your transaction. Fees elsewhere in the UAE can differ. The example 6% buying cost and 2% selling cost are editable modelling assumptions, not official all-inclusive fee rates. Add relevant early mortgage settlement or discharge charges to selling costs; the calculator does not work out statutory or lender caps.

Dubai Land Department: official property registration fee schedule(opens in a new tab)

What belongs in annual ownership costs?

Use a combined annual AED amount for service charges, maintenance and owner-specific insurance or other recurring costs. This model holds that figure constant for the whole horizon. Utilities and other living expenses are excluded; compare homes with similar running costs or reflect material owner-only differences in this input.

How the comparison stays consistent

Both choices start with the same cash: the down payment plus buying fees. The buyer uses it to complete the purchase; the renter invests it. Each month, the model assumes both households can fund the higher of mortgage-plus-ownership costs and rent. Whichever option costs less invests that month’s difference. This avoids treating principal repayments as pure costs or ignoring the renter’s opportunity to invest.

The mortgage is a fixed-rate, reducing-balance loan paid monthly. Rent changes at annual renewal intervals. Both investment balances compound monthly using the effective monthly equivalent of your annual net return, with savings added at month-end. The return is assumed after relevant investment fees and taxes. No deposit is borrowed or invested twice.

At each year-end, the model assumes the property is sold. Buying’s position is sale price minus selling costs and the remaining loan, plus the buyer’s invested cash-flow savings. Renting’s position is the renter’s investment balance. The difference is not a statement of affordability, and these figures are not your total household net worth.

Worked example — not a forecast

With a price of AED 1,000,000, 20% down, 4.5% interest over 25 years, annual rent of AED 70,000 and a five-year hold, the mortgage payment is about AED 4,447 a month. Using the example 6% buying cost, 2% selling cost, AED 12,000 annual owner costs, 3% rent growth, 2% property growth and 4% investment return, the model gives approximately AED 427,645 for buying and AED 316,330 for renting. Change the assumptions rather than treating that result as a forecast.

Use more than one scenario

Try a shorter stay, zero or negative property growth, higher mortgage costs and different investment returns. The first year buying is ahead can change or reverse later; use the full year-by-year table rather than assuming a permanent break-even date. Negative sale equity means additional cash would be needed to clear the loan and selling costs.

Useful next calculations

Check monthly repayments separately with the UAE Loan EMI Calculator

Estimate end-of-service benefits with the UAE Gratuity Calculator

An estimated gratuity payment is not guaranteed available cash. Keep emergency savings and purchase liquidity separate from uncertain future receipts. The tool does not verify income, creditworthiness, residency status or eligibility for a mortgage.

CBUAE: mortgage lending regulations and amendments(opens in a new tab)

Limitations

This is a planning estimate, not financial, tax or legal advice. It assumes a completed owner-occupied home, immediate occupancy, one fixed mortgage rate and sale at the selected horizon. It excludes off-plan payment schedules, taxes not already reflected in your inputs, moving costs, rental agency/admin charges, refundable renter deposits and future changes to owner costs. Rent is spread evenly across months, so upfront cheque timing is not modelled. Returns and property prices are uncertain. Confirm current charges and borrowing terms with qualified advisers.