With high returns and exceptional lifestyle opportunities, the real estate industry in Dubai has progressed significantly in recent years. More and more individuals are looking to invest in property in the Emirate but are still confused about what type of payment plan to choose when buying a property.
Here are the most common payment plans for purchasing property in Dubai that will help make your decision easier.
Post Handover Payment Plan
When purchasing an off-plan property in Dubai, the payment plans are frequently split into portions that must be paid at various times. The post-handover payment plan is an arrangement where the buyer pays a smaller amount upfront and then makes regular installments until the full handover payment is made.
This payment plan is becoming increasingly popular among buyers in the UAE because it can make an off-plan purchase more affordable and give buyers more time to arrange their finances and get a mortgage.
Post-handover payment plans are ideal for buyers who wish to settle into their homes quickly. Additionally, they’re suitable for investors wanting to add the property to their investment portfolio and rent it out to tenants.
10/90 Payments Plan
The 10/90 payment plan is one of the most popular investment plans for buyers in Dubai. It’s beneficial for buyers looking to purchase an off-plan property. The 10/90 payment plan works by allowing the buyer to pay 10% of the total value of the property upfront. The remaining 90% is then paid in installments over the project’s construction period, typically 3-5 years.
One of the significant advantages of this sort of payment plan is that it requires a considerably lesser upfront payment than other options. This can benefit purchasers who don’t have a lot of cash but want to invest in an off-plan property.
Payment in Installments until Handover
Under this plan, the buyer pays a certain percentage of the property value upfront and then spends the rest in installments until handover. The number of installments and their respective due dates depend on the project’s construction timeline.
For example, if the construction is scheduled to be completed in 3 years, then three equal installments might be due at the end of each year. This payment plan is becoming increasingly popular in Dubai, allowing buyers to spread out their payments and make smaller installments over time.
Mortgage Payment Plan
In Dubai, buyers can secure a mortgage to finance their property purchase. Mortgage payment plans are designed to help buyers who might not have the total cash needed to purchase a property outright. With a mortgage, buyers can spread out their payments over some time, typically 15-25 years. Mortgage payment plans are an excellent option for buyers looking to purchase a property but don’t have the total amount of cash on hand. They can also be a good option for investors looking to finance their investment property.
Down Payment Plan
The down payment plan is the most common in Dubai. Under this arrangement, buyers pay a certain percentage of the total purchase price upfront, typically 20-40%. The remaining balance is then paid in installments, typically 3-5 years.
The advantage of this type of payment plan is that it allows buyers to spread out their payments and make smaller installments over time. This can cause an off-plan purchase more affordable and give buyers more time to arrange their finances and get a mortgage.
Rent to Own Payments
In the UAE, rent-to-own payments are pretty popular. This payment solution targets end-users and is only available for ready-to-move-in properties. It’s more appealing to buyers who don’t have a lot of cash upfront but still want to buy a home in Dubai. Rent-to-own payments work by allowing the buyer to pay a certain percentage of the total value of the property upfront and then make monthly installments until the property is fully paid off.
For example, if the total value of the property is AED 1,000,000 and the buyer pays a 20% down payment, then they would need to make monthly installments of AED 8,333 over the next ten years to pay off the property entirely. Rent-to-own payments are an excellent option for buyers who want to purchase a property but don’t have the total cash needed.