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Should you buy or rent your home?

Choosing whether to buy or rent your home is a difficult decision, but we can help you decide which could be the better option for you, with some of the main advantages and disadvantages of buying and renting.

Buying: the upside

Investing in your future

Once you've paid off your mortgage, you'll own your home outright. And if property prices have risen, it could be worth more than what you originally paid for it.

Live your way

Because it's your home, you can do exactly what you want with it. If you want to decorate, extend or refurbish it, you don't have to ask a landlord's permission. Don't forget, you might need planning permission for any structural changes to your home.

Moving on up

If your home increases in value, you could use the equity to move to a bigger house or a more desirable area. You also have the freedom to release some of the equity for home improvements, or to fund a large expense.

Buying: the downside

Saving for a deposit

As per the Central Bank of the U.A.E regulations, when you're buying your first property to live in, you need to make a down payment of at least 20% if you're a UAE national, or 25% if you're a resident expat.[@mortgages-footnote-1]

So if you're buying a home worth AED 700,000, you'd need a down payment of AED 140,000 if you're a UAE national, or AED 175,000 if you're a resident expat. It takes time and commitment to save a large lump sum.

Upfront fees

The extra fees and expenses can soon add up, so you'll need to factor these into your budget. They include, home loan arrangement fees, valuation fees, title deed registration fees and moving costs.

Renting: the upside

Upfront costs

Your landlord will often ask for an initial refundable deposit and may ask for rent payments in advance. This lump sum cost is likely to be lower than the down payment and fees needed to buy a property.

Freedom to move

If you're not ready to settle down in one place, or need to have the flexibility to move around with work or family, depending on the terms of your lease, it may be quicker and easier to leave a rented property.

Repairs and maintenance

If there's a leak in the roof, a broken boiler or faulty washing machine, depending on the terms of your lease, it could be your landlord's responsibility to fix and pay for it.

Renting: the downside

You don't own the property

You won't get any financial return on your money as your rent is essentially going to the landlord. So, you won't benefit from any potential increase in property's value in the future.

Rent increases

There's no guarantee that your rent will stay the same as your landlord has the right to review and increase your rent in the future.

It's not a home for life

Many landlords will only offer tenancy agreements of 6 to 12 months at a time. If they decide to sell, they'll give you sufficient notice, meaning you'll need to find somewhere else to live.

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