DUBAI PROPERTY RESEARCH
Dubai Rent vs Buy Calculator
Compare renting with buying a home to live in. Give both choices the same starting capital and monthly budget, then compare their projected wealth after a sale.
Editable example, not a recommendation. Results update as you type. No live mortgage rates or fixed statutory fees are assumed. Your amounts stay on this page, outside Analytics and shared URLs.
The home and your financing
Projected difference after 7 years
AED 62,395Renting leaves more projected wealth under these assumptions.
After assumed sale costs and loan repayment. This is not a cash saving today.- Buy: sale equity + invested savings
- AED 569,252
- Rent: invested capital + savings
- AED 631,647
- Initial buying cash
- AED 480,000
- Monthly mortgage, principal + interest
- AED 6,253
- First-year monthly ownership outlay
- AED 8,086
- First-year monthly rent equivalent
- AED 8,333
There is no sustained buying advantage at the sampled year-ends within 7 years. Changing the horizon or growth assumptions can change this result.
Follow the money, year by year
| Year | Buy wealth | Rent wealth | Buy minus rent | Mortgage remaining | Buy housing outlay to date | Rent paid to date |
|---|---|---|---|---|---|---|
| 1 | 372,939 | 499,200 | -126,261 | 1,100,078 | 577,037 | 100,000 |
| 2 | 402,143 | 519,168 | -117,025 | 1,074,011 | 674,075 | 200,000 |
| 3 | 432,671 | 539,935 | -107,264 | 1,046,746 | 771,112 | 300,000 |
| 4 | 464,581 | 561,532 | -96,951 | 1,018,229 | 868,150 | 400,000 |
| 5 | 497,937 | 583,993 | -86,056 | 988,401 | 965,187 | 500,000 |
| 6 | 532,805 | 607,353 | -74,548 | 957,204 | 1,062,224 | 600,000 |
| 7 | 569,252 | 631,647 | -62,395 | 924,573 | 1,159,262 | 700,000 |
At the end: AED 200,427 of loan principal repaid; AED 324,835 of interest paid. Principal repayment builds equity and is not counted as a separate loss.
How this comparison works
The renter invests the down payment and buying costs that the buyer spends at the start. Every month, whichever option has the lower housing outlay invests the difference. Both portfolios earn your entered alternative return. The buyer's final wealth is sale proceeds minus selling costs and remaining mortgage, plus invested monthly savings.
The loan is fully amortising with a constant rate, monthly payments and no refinancing. Rent and ownership costs change on annual anniversaries; home value and investment returns compound monthly. Rent is smoothed into monthly payments: cheque timing, refundable deposits, moving costs, tax, inflation and differences in the two homes are not separately modelled. Include known non-refundable costs in your assumptions.
The model does not check your income, credit eligibility or borrowing limits. Review actual loan terms and fees; a mortgage instalment alone is not the full cost of owning. See the CFPB explanation of principal and interest versus total housing payment for the general distinction, not UAE lending rules. Check local charges with DLD and your providers.
For an investment property rather than your own home, use the Property Deal Analyzer.
Use rent versus buy as a scenario, not a verdict
- Compare homes you would actually live in. A cheaper rental and a much larger purchased home are different lifestyle choices.
- Test a flat or falling home value as well as your optimistic case. Check whether the result depends on a return you cannot rely on.
- Use a realistic holding period and exit costs. Moving earlier can change the result even when the monthly mortgage looks affordable.
Why is the down payment not treated as a total loss?
It becomes part of the buyer's equity. For a fair comparison, the renter invests the same starting capital instead. Each side also invests any monthly housing-cost saving at the entered alternative return.
What if the mortgage rate resets?
The model holds one rate constant. It does not simulate a fixed introductory period followed by a floating rate. Rerun a higher constant-rate scenario for sensitivity, then obtain a lender's actual repayment schedule.