For every foreigner planning to relocate to the UAE, housing is one of the most pressing issues. Those who do not have the funds to buy property face a choice: rent or take out a mortgage. Golden Bee experts help you figure out which option is more advantageous. We’ll look at the features of each and run the numbers to assess future costs.
Advantages of Renting
Many expats who choose the UAE as their place of residence prefer renting. And there are indeed several benefits to it:
- Mobility. You can easily move if your job location changes or if new circumstances require you to relocate. This is especially important for expats who don't plan to stay in Dubai long-term.
- Affordability. Unlike mortgages, renting doesn’t require a large initial investment. For those on a limited budget, renting becomes the more viable option.
- Cost-saving. Tenants aren’t responsible for property maintenance, including repairs.
However, while renting may seem attractive at first glance, it also has drawbacks:
- No capital growth. Unlike owning property — even on a mortgage — a rented apartment doesn’t bring returns. Dubai real estate prices increase each year, meaning owners can eventually resell the property and not only recover their investment but also make a profit. Renters simply pay to live.
- Lack of stability. Rental costs tend to rise along with property values. While landlords can't increase rent during an active lease, the next contract may come at a higher price. Plus, tenants are not guaranteed contract renewal. This alone is a major factor in deciding whether to rent or buy with a mortgage.
- Limited control. Renters can't renovate or customize the interior to their liking. Any inconvenience must simply be tolerated.
As we see, rental housing has disadvantages that can be critical for some expats. To decide what’s more beneficial in the UAE — renting or buying with a mortgage — let’s now look at the pros and cons of buying.
Advantages of a Mortgage
There is a common belief that mortgages in Dubai are not available to non-residents. That’s not true. Foreigners without resident visas can indeed get a mortgage. Terms are quite favorable: interest rates range from 5–7%, the down payment is 50% (or 20% for resident visa holders), and loan terms can be up to 25 years.
If you plan to move permanently, have savings, and are trying to decide whether to rent or buy in the UAE, purchasing property with a mortgage is clearly the better option.
Benefits include:
- Capital growth. Property is a profitable long-term investment that will not only pay off but also yield solid returns.
- Passive income. If the investor relocates, they can rent out the property. As mentioned, rental prices in Dubai consistently rise.
- Stability. Mortgage holders can be confident that the property will remain theirs for as long as needed. It can also be inherited, sold, or gifted.
- Full control. Owners are free to renovate, redesign, and modernize the space however they like.
Of course, there are also disadvantages:
- Significant financial input. Buyers must cover the down payment and mortgage-related fees.
- Limited mobility. While tenants can simply move out, selling owned property takes time and effort.
- Additional costs. Besides monthly mortgage payments, owners are responsible for maintenance and repairs.
- Financial risks. If the economic situation changes, the market value of the property might drop — but loan payments will remain the same.
What’s More Beneficial: Renting or Buying with a Mortgage in Dubai?
Now let’s get to the main question: which option is more profitable? Both renting and buying with a mortgage have pros and cons. To make the choice clearer, let’s look at a sample calculation.
Take a small apartment in a popular area priced at $230,000. The rent for a similar unit is $2,800 per month.
If you have a resident visa, you’ll need a 20% down payment — $46,000 — while the bank covers the remaining $184,000. At a 6% interest rate over 20 years, the monthly payment would be about $1,365 — half the rental cost.
If you choose a 10-year mortgage, the monthly payment would be $2,100. In other words, for the same amount you'd pay in rent, you could fully own the apartment in less than 10 years.
Considering that rental prices keep rising, buying with a mortgage becomes the clear winner financially.
Keep in mind that choosing between renting and buying should always be based on your financial capabilities, goals, and long-term plans. If you’re unsure whether you’ve considered all the factors, contact the experts at Golden Bee. We offer in-depth consultations, help you find the right property for living or investment, and provide full transaction support.
