Keep all housing costs within about 30–35% of your take-home pay at a rate 3 points above today's, and budget for buying costs on top of the deposit: UK stamp duty, Dubai's 4% DLD fee, or India's state stamp duty. If comparable rent is below price × 5% ÷ 12, renting is probably cheaper like-for-like.
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| What | Rule used |
|---|---|
| Monthly payment | Repayment mortgage: P × r × (1+r)n ÷ ((1+r)n − 1), r = annual rate ÷ 12, n = months. £200,000 at 5% over 25 years ≈ £1,169; at 8% ≈ £1,544. |
| Stress test | The same loan at your rate + 3 points. The UAE Central Bank asks lenders to test 2–4 points higher. |
| Affordability | Personal rule of thumb from the book: all housing costs within about 30–35% of take-home pay at the stressed rate. In the UAE, total debt payments are capped at 50% of gross income (DBR). |
| UK stamp duty | England and Northern Ireland bands: 0% to £125k, 2% to £250k, 5% to £925k, 10% to £1.5m, 12% above. First-time buyers: 0% to £300k, 5% to £500k (no relief above £500k). +5% on every band for additional property; +2% if not UK resident. |
| Dubai fees | DLD transfer fee 4% of price; registrar/title fee AED 4,200 (AED 2,100 under AED 500,000); mortgage registration 0.25% of the loan; agent 2% + VAT on resales; bank arrangement about 1% + VAT; valuation, NOC and conveyancing as you enter. |
| Maximum LTV | UAE (Central Bank): first home, expats 80% (70% above AED 5m), nationals 85% (75%); second or investment home 60% / 65%; off-plan 50%. India (RBI): 90% for loans up to ₹30 lakh, 80% to ₹75 lakh, 75% above. |
| Rent or buy | 5% rule: price × 5% ÷ 12 vs rent. Own build: year-one interest + lost return on the deposit − expected growth + ownership costs, plus buying and selling costs spread over the years you stay. |
General information as of October 2026, not financial, mortgage, tax or legal advice. Fees, tax bands, lending limits and rates change and depend on your situation; lenders make their own decisions. Check with your lender, conveyancer or a qualified adviser before you commit.
This tool puts a few of the named techniques from Real Estate: Everything You Need to Know to work. Each line says how it relates to the tool.
See every technique in Real Estate: Everything You Need to Know →
Under UAE Central Bank rules, an expat buying a first home to live in can borrow up to 80% of the value (70% above AED 5 million), so the minimum deposit is 20%. Second homes and investment property: up to 60% for expats; off-plan: 50%. You also need roughly 7–9% of the price for fees, including the 4% DLD transfer fee. Non-residents are usually offered lower loan-to-value.
The debt burden ratio is all your monthly loan payments (mortgage, car, cards, personal loans) divided by your gross monthly income. The UAE Central Bank caps it at 50%, and lenders also stress-test the mortgage at 2–4 points above the current rate.
In bands, like income tax: 0% up to £125,000, 2% on £125,001–£250,000, 5% on £250,001–£925,000, 10% on £925,001–£1.5m and 12% above. First-time buyers pay 0% up to £300,000 and 5% up to £500,000. Additional properties pay 5 points more in every band, and non-UK residents 2 points more. A £300,000 home costs £5,000 for a home mover and £0 for a first-time buyer.
Compare the monthly rent of a similar home with price × 5% ÷ 12. If rent is lower, renting is probably cheaper like-for-like; if higher, buying probably is. Then adjust for how long you will stay: buying and selling costs make short stays expensive, so under about five years renting often wins.
RBI rules cap the loan-to-value at 90% for loans up to ₹30 lakh, 80% for ₹30–75 lakh and 75% above ₹75 lakh. Add state stamp duty (commonly 5–7%) and about 1% registration, which you pay in cash on top of the down payment.
A sensible personal rule is to keep all housing costs, including the mortgage, insurance, service charge and maintenance, within about 30–35% of take-home pay, worked out at a rate 3 points above today's. What a bank will lend is a ceiling, not a target.
The 5% rule, the 30–35% housing-cost rule and the typical Dubai agent, bank and conveyancing costs come from Real Estate: Everything You Need to Know (Parts 3, 4 and 9). Everything else is arithmetic on your inputs.