If you’ve renewed a lease in the last year, you’ve probably asked yourself the same thing most residents eventually do: rent vs buy — which one actually saves more over time?
In the UAE, this question isn’t just about lifestyle. It’s a real math problem because:
- Buying comes with big upfront fees (transfer, registration, mortgage fees).
- Renting can rise quickly, but in Dubai there are rules and tools that help you check whether an increase is even allowed.
- Property prices can go up… or cool down (and that changes everything).
Let’s break it down in a simple, practical way—and show you how to find your break even point rent vs buy without turning it into a finance textbook.
The honest answer (before we calculate)
Most people get the best outcome when they match the decision to their timeline:
- Staying 1–3 years: renting usually wins (upfront buying costs are hard to recover).
- Staying 4–7 years: it depends (this is where a proper rent vs buy analysis matters).
- Staying 7–10+ years: buying can win if the numbers make sense and you pick a property that holds value.
So the real question becomes: how many years until buying breaks even?
What renting really costs in the UAE
Renting looks simple (pay rent, done), but over time these things matter:
- Annual rent (your biggest cost)
- Rent increases at renewal
In Dubai, you can check rent increase allowances using the official Rental Index tool from the Dubai Land Department.
Many residents also use the RERA rent increase calculator concept (same idea: “is the increase legal?”). - Moving costs every time you switch areas/buildings (often ignored in calculators)
- “Soft costs” like uncertainty, landlord changes, and time spent negotiating renewals
And importantly: in 2025, multiple Dubai areas saw noticeable rent growth (reports commonly showed wide ranges depending on community and unit type).
What buying really costs (the part most people underestimate)
Buying can build equity, but you pay for the privilege upfront.
1) Down payment (and how mortgages are priced)
For residents, lenders often finance a portion of the property value, meaning you’ll usually need a meaningful down payment (commonly 20–25% depending on profile and property).
Mortgage rates in Dubai vary by bank and borrower profile; market commentary commonly places “typical” residential ranges around the mid-to-high single digits or lower (depending on the cycle), and mortgage pricing often references benchmark rates like EIBOR published by the Central Bank of the UAE.
2) One-time buying fees
If you’re buying in Dubai, these are the big ones to budget for:
- DLD transfer/registration fee: 4% of purchase price
- Mortgage registration fee: 0.25% of mortgage value (Dubai Land Department mortgage services show this fee structure)
- Trustee / registration office and admin-style fees exist too, and they add up.
(Other costs can include agent commission, bank processing, property valuation, and developer NOC depending on the transaction.)
3) Ongoing ownership costs
These vary by building/community, but typically include things like:
- Service charges / maintenance reserves
- Insurance (often required by lenders)
- Repairs (owners feel these more than tenants)
This is exactly why many people do a “quick” calculation and still end up surprised later.
Rent vs buy calculation: how the break-even point actually works
Here’s the simplest way to think about it:
Renting cost (over N years)
You pay rent every year, and you never get any of it back.
Buying cost (over N years)
You pay:
- Down payment + fees upfront
- Mortgage payments + ownership costs yearly
But you also get money back when you sell, after:
- selling costs, and
- paying off the remaining mortgage balance.
So the break even point rent vs buy is the year where:
“Total net cost of buying ≈ total cost of renting”
A real-world example
Let’s do a realistic-style scenario many residents can relate to.
Assumptions (example only):
- Property price: AED 1,500,000
- Down payment: 25%
- Mortgage: 25 years
- Rate: within the commonly cited market range (example rate used for illustration)
- Upfront buying fees include DLD transfer fee (4%) + typical mortgage/buying fees
- Current rent for a similar unit: AED 75,000/year
- Rent growth assumption: moderate (and checkable with official tools)
What the math usually shows
In this type of setup, the buy vs rent break even often lands somewhere like:
- ~6–8 years if prices stay roughly flat and rent keeps rising moderately
- 10+ years if prices dip or selling conditions worsen
- 4–6 years if rents are high relative to prices and values rise
The takeaway: your break-even is extremely sensitive to two things
- rent-to-price ratio, and
- what happens to prices over your holding period.
Why timing matters in Dubai
Dubai has seen strong momentum recently, which affects both rents and buying decisions:
- ValuStrat reported notable annual growth in Dubai residential values during 2025 (with villas leading in many periods).
- Knight Frank also highlighted record activity in 2025, with very high transaction volumes in key quarters.
But it’s not one-direction forever. Some forecasters have warned that increased supply could pressure prices, and major outlets have discussed potential correction scenarios.
This doesn’t mean “don’t buy.” It means: do the calculation with at least 2–3 scenarios (flat, optimistic, and conservative).
A simple rent vs buy calculator you can use (in 5 minutes)
If you want a DIY rent vs buy break even calculator, use this checklist:
Step 1: Set your timeline
How long will you realistically stay? 3, 5, 7, 10 years?
Step 2: Estimate your rent path
- Start with current annual rent
- Check renewal guidance using the Dubai Rental Index tool (Dubai)
- Add a reasonable annual increase assumption
Step 3: Estimate your buying costs
Include:
- Down payment
- DLD transfer fee (Dubai: 4%)
- Mortgage registration fee (Dubai: 0.25% of mortgage value)
- Other typical buying fees (bank/valuation/agent etc.)
Step 4: Calculate mortgage payments
Use the mortgage calculator on Credit Link to estimate monthly payments quickly.
Step 5: Add ownership costs
Service charges + maintenance + insurance (use a conservative estimate if unsure).
Step 6: Run 3 resale scenarios
- Conservative (price down)
- Neutral (flat)
- Optimistic (up)
The year where buying becomes cheaper than renting is your Dubai rent vs buy calculator result—and your decision becomes much clearer.
Should I rent or buy? A decision checklist
Buying tends to make more sense when:
- You’ll stay 7+ years
- You have stable income and a comfortable buffer
- The property is in a strong rental/resale area
- Your monthly payment is close to (or not wildly above) rent
- You’re okay paying upfront fees to build long-term equity
Renting tends to make more sense when:
- You may leave in under 3–5 years
- You want flexibility (job changes, kids’ schools, etc.)
- Prices feel overheated for your specific area
- You’d rather invest your down payment elsewhere
- You don’t want maintenance/ownership responsibility
Conclusion:
In the UAE, rent vs buy comes down to one thing: how long you’ll stay. If you may move in the next few years, renting usually wins because buying has heavy upfront fees. If you’re staying long-term, buying can save more once you hit the buy vs rent break even point. Do a quick rent vs buy calculation using a rent vs buy calculator (or mortgage vs rent calculator) to find your break-even year—then decide with confidence.
Still deciding between rent and buy?
Get a free rent-vs-buy assessment from our mortgage experts — we’ll compare your monthly costs, upfront fees, and break-even timeline based on your budget.
FAQs:
1) Should I rent or buy in the UAE?
Rent if you might move in the next few years. Buy if you’re staying long-term and the numbers reach a clear break-even point.
2) What is the break even point in rent vs buy?
It’s when buying becomes equal to or cheaper than renting over time. It depends on fees, rent level, interest rate, and resale value.
3) What costs should I include in a Dubai rent vs buy calculation?
Buying includes transfer/registration fees, down payment, mortgage fees, service charges, and maintenance. Renting includes annual rent, renewals, and moving costs.
4) Is buying still worth it if my mortgage is higher than rent?
Sometimes, if you’re building equity and staying long enough. But if the gap is big, renting can stay cheaper for longer.
5) How do I compare rent vs buy without a calculator?
Estimate total rent for your expected stay, then compare it to buying costs minus expected resale proceeds. A mortgage advisor can run the numbers based on your real budget.
