Dubai Rent vs Buy Calculator

Renting vs buying in Dubai, how the comparison works

Comparing total rent with total mortgage payments is misleading: part of every mortgage payment buys you more of the home. Instead, the calculator follows both options month by month and compares where each leaves you financially at the end.

The buyer pays the down payment (or the full price, in cash) and the purchase costs. The renter keeps that cash.
Each month the renter pays rent; the buyer pays the mortgage and ownership costs. Whichever is cheaper that month saves the difference.
Savings can earn an alternative return if you switch on opportunity cost. By default they are kept but do not grow.
At the end of each year the buyer’s position is the property value, less the mortgage still owed and the costs of selling, plus their savings. The renter’s position is the cash they kept plus their savings.
The difference between the two is the financial gap, and the first year buying is level or ahead is the modelled break-even.

Every growth rate starts at 0%: rents, prices and costs stay flat unless you enter an assumption. That neutral case is a legitimate scenario, not a forecast.

Why mortgage principal is not the same as a housing cost

Each mortgage payment has two parts. Interest is the cost of borrowing: like rent, it is gone. Principal repays the loan, so it reduces what you owe and builds your equity in the home. The calculator keeps them apart: interest and ownership costs are housing costs; principal shows up as a lower mortgage balance at the end.

In the worked example below, AED 400,199.39 of mortgage payments over 5 years is AED 254,494.23 of interest and AED 145,705.16 of principal. Counting the whole amount as a cost would overstate the cost of buying by the principal.

What is the rent vs buy break-even point?

The first modelled break-even year is the earliest full year in which the buyer’s position is at least equal to the renter’s. Buying often starts behind, because purchase costs are spent on day one and would be followed by selling costs on a sale, while the renter keeps that cash. It catches up through principal repaid, any appreciation you assume, and any months in which owning costs less than renting.

The calculator checks each year up to your comparison period and does not extrapolate beyond it. If the lead changes more than once, it reports the first break-even year and the year-by-year table shows the rest. In the worked example, buying is renting ahead by AED 52,649 after 3 years and first draws level in year 5.

How buying costs affect break-even

DLD, trustee, agency and mortgage registration fees are paid when you buy and do not become equity. They are never added back to the buyer’s position. The calculator does not assume them: enter your own total, or estimate it with the Dubai Property Buying Cost Calculator. For the government registration fees alone, see the DLD fee calculator.

Worked example with and without AED 100,000 of purchase costs

AED 100,000 purchase costsbuying ahead by AED 5,506 at year 5; break-even year 5: +AED 5,506
No purchase costs enteredbuying ahead by AED 105,506 at year 5; break-even year 2: +AED 105,506

How selling costs affect the result

The buyer’s position assumes a hypothetical sale at the end of each year, so the costs of selling, such as agency commission and any transfer costs you would pay, reduce the equity released. Enter them as a percentage of the modelled sale price, a fixed amount, or both. Nothing is assumed: the 2% in the worked example is an illustrative assumption, not a statutory or standard Dubai seller fee. For a detailed estimate, use the Dubai Property Selling Cost Calculator.

Worked example with and without selling costs

2% illustrative selling costbuying ahead by AED 5,506 at year 5; break-even year 5: +AED 5,506
No selling costsbuying ahead by AED 35,506 at year 5; break-even year 4: +AED 35,506

How mortgage rates affect rent vs buy

A higher rate means more of each payment is interest and less is principal, so buying takes longer to catch up. The calculator uses one fixed rate for the whole term, on a reducing balance; real mortgage pricing can change and lender products vary. The term can be up to 25 years, the CBUAE maximum. It does not check whether a lender would approve the loan; for borrowing limits, use the Dubai Mortgage & Affordability Calculator.

Worked example at three illustrative rates

3.5%: AED 6,007.48 a monthbuying ahead by AED 63,706 at year 5; break-even year 4: +AED 63,706
4.5%: AED 6,669.99 a monthbuying ahead by AED 5,506 at year 5; break-even year 5: +AED 5,506
5.5%: AED 7,369.05 a monthrenting ahead by AED 53,401 at year 5; break-even not reached in 5 years: −AED 53,401

The rates are illustrations, not market quotes. Between 3.5% and 5.5%, the five-year gap moves by AED 117,107.

How rent growth affects the comparison

The rent growth input is a planning assumption for future rent, not a calculation of the legally permitted increase for an existing tenancy. It is applied once a year, from year 2, and defaults to 0%. Negative values are allowed.

In Dubai, the maximum increase on renewal is set by Decree No. 43 of 2013 and depends on how the current rent compares with the average for similar units in the RERA rental index. The calculator does not apply those bands. To see the permitted increase for a specific tenancy, use the Dubai Land Department’s Rental Index (opens in a new tab).

Worked example with rent flat and rising

Rent growth 0% a yearbuying ahead by AED 5,506 at year 5; break-even year 5: +AED 5,506
Rent growth 3% a yearbuying ahead by AED 36,419 at year 5; break-even year 5: +AED 36,419

At 3% a year, year-5 rent is AED 112,550.88. Once rent overtakes the buyer’s monthly costs, the buyer saves the difference: AED 22,754.07 over 5 years here.

How property appreciation changes the result

The property appreciation assumption is applied as an annual rate, compounded monthly in the simulation, and can be positive, zero or negative. It defaults to 0%, so the property is worth what you paid unless you enter a rate. It is an assumption, not a forecast: Dubai Numerics does not predict property prices, and prices can fall as well as rise.

Worked example at three appreciation assumptions

−2% a yearrenting ahead by AED 135,731 at year 5; break-even not reached in 5 years: −AED 135,731
0% a yearbuying ahead by AED 5,506 at year 5; break-even year 5: +AED 5,506
+2% a yearbuying ahead by AED 158,505 at year 5; break-even year 3: +AED 158,505

Small changes in this assumption move the result more than most other inputs, because they apply to the whole property value. Try a range of rates, including negative ones, rather than relying on one.

Why opportunity cost matters

A fair comparison starts both sides with the same money. If the buyer puts AED 400,000 into a down payment and purchase costs, the renter still has that AED 400,000. The calculator always counts it in the renter’s position, and adds every month’s saving to whichever side spent less.

With opportunity cost off (the default), that cash is kept but does not grow. Switch it on to give both sides’ savings an alternative annual return of your choosing. It is converted to a monthly rate; existing balances grow each month and the month’s saving is added at the end of the month. No rate is assumed and none is guaranteed.

Worked example with opportunity cost off and on

Off: cash kept, not grownbuying ahead by AED 5,506 at year 5; break-even year 5: +AED 5,506
4% alternative returnrenting ahead by AED 82,206 at year 5; break-even not reached in 5 years: −AED 82,206

At 4%, the renter’s balance earns AED 87,712 over 5 years. Whether such a return is achievable, and at what risk, is outside this calculator.

Dubai rent vs buy worked example

Renting at AED 100,000 a year, compared with buying a AED 1,500,000 property with AED 300,000 down and a AED 1,200,000 mortgage at 4.5% over 25 years. Purchase costs AED 100,000; service charges AED 15,000, maintenance AED 5,000 and insurance AED 2,000 a year. Over 5 years with rent growth, cost growth, appreciation and alternative return all at 0%, and an illustrative 2% selling cost.

Buying, at year 5

Monthly mortgage payment: AED 6,669.99
Monthly ownership costsAED 22,000 a year ÷ 12: AED 1,833.33
Interest paid: AED 254,494.23
Principal repaid: AED 145,705.16
Property value: AED 1,500,000
Mortgage balance: −AED 1,054,294.84
Selling costs (2%): −AED 30,000
Net home equity: AED 415,705.16
Buyer savings: AED 0
Buyer ending position: AED 415,705.16

Renting, at year 5

Monthly rent: AED 8,333.33
Cash kept at the startDown payment + purchase costs: AED 400,000
Monthly savings addedOwning cost more each month: AED 10,199.38
Investment growthOpportunity cost off: AED 0
Renter ending position: AED 410,199.38
Difference (buying − renting): +AED 5,505.78
First modelled break-even: Year 5

Under these assumptions buying is financially ahead by AED 5,506 after 5 years, a small margin. Every number here comes from the same engine as the calculator: the monthly simulation runs at full precision and figures are rounded once for display. Change any assumption and the result can reverse. The guide to the cost of buying property in Dubai explains the purchase costs in detail.

What this calculator does not decide

It compares the financial position of renting and buying under your assumptions. It does not determine:

whether a specific property is a good investment
the decision to buy or rent, which remains yours
future Dubai property prices or future mortgage rates
mortgage approval or how much a lender would offer
the legal rent increase for a specific tenancy
tax consequences in another country
utility, moving or furnishing costs, unless you enter them
unexpected major repairs, or developer-specific fees
any certainty of capital gains
the personal, lifestyle value of owning or renting

Actual outcomes can differ. Off-plan purchases, interest-only and variable-rate mortgages, refinancing and early settlement are not modelled.

Official sources and methodology

The calculator uses no market rates: rent, prices, costs and every growth rate are your inputs. The only regulatory figure applied is the 25-year maximum mortgage term, with reducing-balance repayments, from the Central Bank of the UAE’s mortgage regulations. The DLD Rental Index and Decree No. 43 of 2013 are referenced to explain why rent growth is a planning assumption, and DLD Property Sale Registration explains the fees a sale can involve. All were read directly on 5 October 2026.

Read our methodology

Frequently asked questions

Is it better to rent or buy in Dubai?

There is no single answer: it depends on the rent, the price, the mortgage rate, the costs of buying, owning and selling, how long you stay, and what happens to rents and prices. The calculator shows which option is financially ahead under the assumptions you enter. It does not decide what you should do, and it leaves out the personal value of owning or renting.

How many years do I need to live in Dubai for buying to make sense?

It depends on your numbers. When purchase costs are included, buying starts behind because that money is spent on day one, and it needs time to catch up, if it does. In our worked example, with AED 100,000 of purchase costs and no change in prices, buying first draws level in year 5. Enter your own figures and look at the year-by-year comparison.

What is a rent vs buy break-even point?

The first full year in which the buyer's financial position (net home equity after a hypothetical sale, plus any savings) is at least equal to the renter's (the cash they kept, plus their savings). The calculator reports the first modelled break-even year within your comparison period and never extrapolates beyond it.

Should mortgage principal count as a cost?

No. The interest part of a mortgage payment is a financing cost, but the principal part reduces the loan and builds the buyer's equity. The calculator tracks both separately and counts principal through the lower mortgage balance at the end, so total mortgage payments are not treated as money lost.

How do Dubai buying costs affect the comparison?

Purchase costs such as DLD and agency fees are spent at the start and do not become equity, while a renter keeps that cash. In our worked example, removing the AED 100,000 of purchase costs moves the first modelled break-even from year 5 to year 2. The calculator only includes the purchase costs you enter; the Buying Cost Calculator can estimate them.

How do selling costs affect rent vs buy?

The buyer's position assumes a hypothetical sale at the end of the period, so any selling costs reduce the equity released. In our worked example, an illustrative 2% selling cost reduces the buyer's position by AED 30,000: buying is ahead by AED 5,506 with it and AED 35,506 without it. No selling cost is assumed unless you enter one.

Does the calculator assume Dubai property prices will rise?

No. Property appreciation defaults to 0%, so the property is worth its purchase price at the end unless you enter an assumption. Any rate you enter, positive or negative, is a planning assumption: Dubai Numerics does not forecast property prices.

How does rent growth affect the result?

Higher future rent makes renting more expensive over time, which tends to help the buying side. The calculator applies your rent growth assumption once a year, from year 2. It defaults to 0% and can be negative.

What happens if property prices fall?

A lower value at the end reduces the buyer's net equity, and with a small down payment it can turn negative. In our worked example, a 2% annual fall in prices leaves renting ahead by AED 135,731 after 5 years. Negative equity is shown as a negative figure, never hidden.

What is opportunity cost in a rent vs buy calculation?

The return the renter could earn on the cash they did not spend on a down payment and purchase costs, and that either side could earn on monthly savings. It is off by default. When you switch it on, you choose the rate; no return is assumed or guaranteed.

Does this calculator include mortgage eligibility?

No. It does not check debt burden ratio limits, income multiples or loan-to-value limits, or whether a lender would approve the loan. Use the Dubai Mortgage & Affordability Calculator for borrowing limits. The mortgage term is capped at 25 years, the CBUAE maximum.

Can I compare a cash purchase with renting?

Yes. Choose cash purchase: the buyer pays the full price and purchase costs up front, the renter keeps the same amount, and there are no mortgage payments. In months when owning costs less than renting, the buyer saves the difference.

Does this calculator calculate my legal rent increase?

No. The rent growth input is a planning assumption for future rent, not a calculation of the legally permitted increase for an existing tenancy. Under Decree No. 43 of 2013, the maximum renewal increase depends on how the rent compares with the average for similar units in the RERA rental index. The DLD Rental Index shows the permitted increase for a specific tenancy.

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