If only it were as clear as seeing the sale price of your dream home, and that was all you needed to budget for.

The cost of buying a home adds up and the best way to prepare is to understand every fee that is headed your way. Whether it’s your first or umpteenth home purchase, budgeting and getting the numbers right will allow for a smoother journey.

To understand the fees, we break them down into 5 categories:

Mortgage
a. Down Payment
b. Bank Mortgage Processing Fee
c. Property Valuation Fee
d. Mortgage Payments
Government
a. DLD (Dubai Land Department) Transfer Fee
b.DLD (Dubai Land Department) Property Registration Fee
c. DLD (Dubai Land Department) Mortgage Registration Fee
d. Oqood Certificate (if off-plan)
Service
a. Security Deposit
b. Agency Fee
c. Conveyance Fee
Maintenance
a. Maintenance Fee
b. DEWA (Dubai Electricity and Water Authority)
c. Gas
d. AC
e. Internet
Insurance
a. Life Insurance
b. Property Insurance (recommended)

The list might seem long but not all of these costs are upfront. You will have to include upfront costs in your home buying budget while ongoing costs are part of your living expenses.

Upfront vs. Ongoing costs

Upfront	Ongoing
Down Payment Bank Mortgage Processing Fee Property Valuation Fee DLD Transfer Fee DLD Property Registration Fee DLD Mortgage Registration Fee Oqood Certificate (if off-plan) Conveyance Fee Agency Fee Security Deposit	Life Insurance Property Insurance (recommended) Mortgage Payments Maintenance Fee DEWA (Dubai Electricity and Water Authority) Gas AC Internet

What are the upfront costs?

For a AED 1 million home, you can expect approximately AED 207,000 in mortgage fees, AED 47,000 in government fees, and AED 27,000 in service fees. In total, you’ll need about AED 281,000 set aside.

At Nomad Homes, we can provide you with a personalized cost and budget guide, created just for you and the properties you’re currently looking at.

Get my personalized guide

Mortgage

Down Payment
This is the initial up-front partial payment. The amount saved for a down payment is typically one of the factors which affect how much the bank is agreeing to lend for a mortgage. This is normally a minimum of 20% of the loan amount.

Bank Mortgage Processing Fee
For buyers completing their purchase with a mortgage, this fee is payable to the bank. The processing fee is usually 0.5% of the loan amount + 5% VAT, but it varies depending on the bank.

Property Valuation Fee
Another fee payable to the bank for a mortgage buyer is the property valuation fee. The rate varies for this fee too, and it is dependent on each bank. The rate ranges from AED 2,500-3,500 + 5% VAT.

Government

Costs paid to the government are to the Dubai Land Department (DLD), established to manage the sale and purchase of land. They approve, organize and document the real estate in Dubai.

DLD Transfer Fee
All property purchases must be registered with the Dubai Land Department (DLD). The amount is paid by the buyer and usually at 4% of the Purchase Price + AED 580.

DLD Property Registration Fee
A registration fee, payable by the buyer to DLD at the rate of AED 4,000 + 5% VAT.

DLD Mortgage Registration Fee
If the buyer is buying the property through a mortgage, a mortgage registration fee to the DLD is also applicable at 0.25% of the loan amount + AED 290.

Oqood Certificate (if the property is off-plan)
It ensures that the property is registered with the name of the buyer. Issuance fee for Oqood Certificate is AED 5,250.

Service

Security Deposit
When buying a property on secondary market transactions, the buyer is required to pay a deposit to secure the purchase. The amount is typically 10% of the purchase price payable to the seller via cheque. This amount is collected by the authorized agent (a RERA registered broker) who holds the deposit until the property is successfully transferred.

Agency Fee
Payable on completion of property purchase to your agent at the rate of 2% of the property price plus 5% VAT.

Conveyance Fee
Appointing a conveyancer ensures all the legal terms and contracts are accurately stated as per the UAE law and protects the interests of all parties involved. The amount is payable directly to the conveyancer with the range from AED 6,000-10,000.

What are the ongoing costs?

For an AED 1 million home, you can expect approximately AED 4,200 for mortgage payments per month. And annually AED 37,500 for maintenance fees and AED 4,200 for insurance.

Mortgage

This is the amount you pay every month towards your mortgage.

Maintenance

Maintenance Fee
This fee is for the upkeep and maintenance of the residential communities or buildings. The charges are usually calculated based on the square foot.

DEWA / Gas / AC / Internet
DEWA, which stands for Dubai Electricity and Water Authority, is the company that manages water and electricity supply in Dubai. Gas, AC and Internet can be chosen from numerous providers.

Insurance

Life Insurance
This is the mandatory insurance for mortgage buyers. Depending on the bank where the mortgage was taken, the rate can range from 0.4%-0.8% per annum on the remaining loan amount.

Property Insurance (recommended)
Property insurance is not compulsory in Dubai, however, it is recommended. The price range varies and it is approximately AED 1,000 per annum.

The costs of buying and even owning a home can really add up, so it’s important to work out your budget ahead of time. At Nomad Homes, we have experienced advisors who will give you their unbiased advice and use their years of experience to your advantage.

Need more information? Speak with our team to talk about how you can buy your dream home, or call +971 04 215 6383

Let's talk

How much does buying a home really cost in Dubai?