What an off-plan payment plan really costs you

Every off-plan brochure leads with a price. Almost none of them lead with the payment plan, which is strange, because the plan is what determines whether you can actually afford the building.

A 60/40 plan means 60 percent of the price is due across the construction period and 40 percent on handover. An 80/20 front-loads you: 80 percent before you hold keys. A post-handover plan lets you keep paying after you have moved in or let the unit out. Same headline price, three completely different cash-flow profiles.

The question to ask

Not 'what does it cost' but 'what do I have to find, and when'. Map the instalments against your own income and any rent you expect to collect. A plan that looks generous on paper can still land a 40 percent balloon payment in a quarter when you have nothing coming in.

• What percentage falls due before handover, and on what trigger — dates or construction milestones?
• Is there a post-handover component, and what does it cost in effective interest?
• What happens if the project is delayed past the handover quarter?
• Can the plan be transferred if you sell before completion?

What the plan does not include

Budget roughly 6 to 7 percent on top of the purchase price for the Dubai Land Department transfer fee, registration, trustee and agency fees. None of that appears in the payment plan, and it is due in cash. Mortgage buyers should add valuation and arrangement costs.

Every project page on this site shows the full plan, milestone by milestone, with the amount in dirhams against each one. You should not have to send an enquiry to find out how a deal is structured.