HOT OFF THE PRESS: How much should you earn to buy a property worth $1 million?

Last week, our Chairman; Lewis Allsopp sat down to chat with Arabian Business about how much individuals in Dubai should be earning to afford a property worth $1 million in Dubai comfortably.

And here’s everything you need to know…

Prospective UAE property buyers should earn between AED 240,000 to AED 550,000 annually, depending on age, debt, and loan terms.

Lewis shared that for a $1 million (AED 3.67 million) property, buyers should expect a down payment of at least 20%, or $200,000 (AED 734,578).

In such cases, buyers should earn AED 500,000–550,000 annually to comfortably afford the mortgage, which could be AED 15,333 per month over 25 years. However, the down payment and terms can vary based on age, credit score, and bank lending policies.

The debt-to-income ratio

In Dubai, mortgage lenders assess borrowers using a debt-to-income ratio (DTI) to determine their ability to manage monthly payments.

According to Lewis, banks or lenders allocate 50% of a borrower’s income towards their debt burden, deducting liabilities like loans and credit card payments. The remainder is used for the mortgage with banks calculating based on a stress rate (2% higher than the mortgage rate) and the loan term, which is up to 25 years.

For example, if someone earns AED 15,000 monthly and has AED 6,000 in debt payments, their DTI ratio would be 40%.

Lewis also noted that some banks offer special incentives, such as preferential interest rates and reduced fees for high-net-worth individuals who maintain significant cash balances or income levels. For a $1 million home, buyers should budget at least AED 15,000 per month for mortgage payments. A good credit score is crucial for securing a mortgage, and poor credit usage can lead banks to reduce loan amounts or decline applications entirely.

Additional costs beyond the purchase price include transaction fees like DLD transfer fees, agent commissions, and maintenance charges. Lewis shared that maintaining a good credit score, paying bills on time, and avoiding new loans before applying for a mortgage are essential steps for prospective property buyers in Dubai.

Want to know more?

You can drop our in-house mortgage team a line!

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