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Mortgage Down Payment in the UAE
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Learn About Saving your Mortgage Down Payment in the UAE

Holo Blog

Buying and owning a house is something that many people in the United Arab Emirates strive to achieve and work towards. However, the prospect of home ownership in your 20s or 30s may seem like a pipe dream as your salary is stretched so thin for day-to-day expenses, let alone a mortgage down payment.

Inflated property prices, a difficult economic landscape, and possibly even the restraints of lingering debts (such as student loans) may leave you feeling that financing a house is simply unattainable. Don't worry; you're not alone. Many people of all ages are still renting for this very reason.

How much should you save for a down payment on a house?

Putting at least 20% down on a home will increase your chances of getting approved for a mortgage loan at a decent rate. If you're unsure about the amount you need as a mortgage loan, mortgage calculators are available to assist you.

What happens if you don't have a down payment?

When a person does not have the necessary sum in order to fund a down payment for a property in Dubai, another way in which they are able to access these funds is by leveraging gifts from family and friends. These may be used as down payments. However, banks are not in a position to accept loans (whether these are interest-bearing or interest-free) from family. Most lenders will also ask for a letter from the family member in addition to proof that the funds are not from a personal loan.

Existing property

If you sell your current home, you can use the equity from your existing home to fund the mortgage down payment on the new home, granting you a higher chance of mortgage loan approval as well as a more favorable interest rate.

Be warned that even though you may already own a property, you'll have to go through the same process in terms of applying for your next mortgage loan as you did for your first property, including a credit check.

Lease-to-own option

The term "rent-to-own" refers to a leasing arrangement that provides for the rental of a property for an agreed-upon period. At the end of this period, the renter has the option to buy.

The rent-to-own option is especially appealing for young buyers who are not able to qualify for a mortgage loan in the traditional way. Rent-to-own provides a window of time in which to build up the means for financing their dream house.

As the tenants are renting with a view to one day owning the home, they are more inclined to keep it in good condition. As a result, this benefits the seller.

Non-cash assets

The term "non-cash assets" describes a person's long-term investments or assets, such as real estate property holdings. These items are often highly illiquid, which means that they cannot easily be converted into cash.

Down payment requirements in the UAE

Once you have decided to enter the property market and buy a house in the UAE, you will need to secure financing in order to complete the transaction. Buying a property outright with liquid assets or personal savings is not a reality for most, and completing the home-buying journey is only possible with a mortgage loan.

The minimum mortgage down payment on a house in Dubai is 20% for expats and 15% for locals. That means that if the price of the home you're wanting to finance is AED 1 million, the money you'll need to put up front is AED200k (if you're an expat) and AED 150k (if you're an Emirati).

Tips on how to save for your mortgage down payment

Saving up enough to buy a home can feel like an impossible task. However, with a solid saving plan, anyone can put away enough for a mortgage down payment on the home of their dreams. There are several simple strategies you can use to finance a house a little easier.

To calculate how much you need to save, try using a mortgage calculator. There are a lot of mortgage payment calculators with down payments available on the Internet for you to use. The Holo application will give you an exact breakdown of all of the associated costs.

Set your goal

The best way to save up for a mortgage down payment on a house is to know the exact amount you need.

Ask yourself these three questions -

  • How much should I save for a mortgage down payment on a house?
  • How long will it take me to save for that mortgage down payment?
  • Where can I put money for a mortgage down payment?


You'll be surprised at the amount of money you find when you pay attention to your spending. Here are some suggestions to help you temporarily reduce your spending while you work to ensure that home ownership is a certainty -

  • Take a break from the gym
  • Save eating out for special occasions
  • Trim your clothing budget
  • Buy generic brands at the grocery store


The usual rule is that your housing costs should never be more than a third of your total income. However, if you have other debts, such as a car loan, student loans, or credit cards, they could very easily limit the amount of money you can put toward a mortgage loan.

Consider paying a portion of your debt first, which will not only help alleviate some of the financial pressure but also assist you in securing a better mortgage loan rate. While it may sound counterintuitive to pay down debt in order to save, once those debts are paid off, you could have hundreds, if not thousands, of dirhams freed up that can help you save faster.

Cut down on rent

One of the best ways to ensure that you're able to actively save for a mortgage down payment on a house is to cut back on your expenditure in other areas of your life.

If you are not sure where to begin, then it's a good idea to start by taking a look at what you spend on your current accommodation:

What portion of your income does your rent demand? If it's anything from 30% onward, it's time to look for a more affordable place.

Find accommodations to share with others, opt for a smaller room, or move to a less expensive area, don't pay an inordinate amount of money towards someone else's mortgage loan when you can save for your own.

Trade in your car

If you're really serious about saving for your mortgage down payment and you drive an expensive car that costs a fortune in upkeep, think about trading it in for a more economical model. You'll then be able to put the money, which you would have spent on your car, towards your mortgage down payment.

Bargain hunt

There's no doubt that "every little bit adds up" over time. Do what you can to buy what you need to, but at the best possible prices. You can aim to plan your meals around items at the store that are on sale, join loyalty programs, and sign up for email lists that notify you of sales saving on the necessities means you can lower your budget and save more for the mortgage down payment.

Put off all vacations

To save enough for a decent mortgage down payment on a house, you'll almost certainly need to devote all of your savings to that purpose. Rather invest in something you can one day own (and live in!) as opposed to "investing" in fleeting experiences. Your time to travel will still come (if you want it badly enough).

Investigate different types of savings accounts

There are many different types of savings accounts that offer different interest rates. It's important to choose the one that's right for your financial needs.


A good place to generate cash to put towards your savings goal is by decluttering your house. Go into each room, look around, and try to be brutally objective. All the things that are no longer being used but are in excellent condition should be sold.

Cash in on investments

The great thing about investments is that they are usually high-yielding, so if you are almost at your mortgage down payment goal, then consider cashing in some of your investments to get you the final part of the way.

Supplement your income

If you don't yet have all of your ducks in a row for financing a house, don't get discouraged. Instead, hustle your way to homeownership with a unique part-time job.

Learn more about the mortgage process and how Holo can help you.

If you want to learn more about the mortgage process so that you can secure your dream house, speak to us at Holo we can help!

This blog is for educational purposes, but everyone's case is unique, and local guidelines and regulations may change. Our mortgage advisors can help you with any question you may have and have the latest advice. Get in touch.

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