Developer instalments: how to read a payment plan

In the Emirates, mortgages are rarely used for homes under construction. Instead, the developer offers a payment plan. It is not a loan: no bank is involved, there is no interest and no proof of income is required. You simply pay in instalments to the schedule set out in the contract.

Payment plans are listed for 1,779 projects in our catalogue. These are the most common structures.

How to read “20 / 40 / 40”

Three numbers, three stages.

There is also a “100% at booking” plan. It is offered for completed homes and projects where the developer gives a discount for full payment. The discount is usually 5 to 10%.

What post-handover means

Sometimes the final part of the schedule falls after handover: you have already moved in or let the apartment, but payments continue for another one or two years. This is called post-handover, meaning after handover. It works well if the apartment is rented out: in effect, the tenant pays the remaining balance for you.

There is one costly catch: until the final payment has been made, the apartment cannot be sold without the developer's consent, and sometimes it cannot be sold at all. If your plan is to resell before handover, post-handover does not suit you.

Three plans from the catalogue

The same purchase, three different schedules. Beneath each listing is the plan as announced by the developer.

Motor City

Sobha Orbis

The classic: a quarter at booking, most during construction and the balance on receiving the keys.

20% at booking · 40% during construction · 40% on handover

Dubai Hills

Elvira

Most of the burden falls during construction. A fifth remains on receiving the keys, but payments will be frequent and made over a short period.

10% at booking · 70% during construction · 20% on handover

Jumeirah Village Circle (JVC)

Sky Hills Residences 3

The balance falls after handover: nearly half the amount is paid when the apartment is already yours and can be rented out.

20% at booking · 30% during construction · 10% on handover · 40% after handover

How to tell whether you can meet the schedule

Percentages in a payment plan look harmless until they turn into amounts. Take a mid-range listing from the catalogue: an AED 1.84 million apartment, with 20% at booking, 40% during construction and 40% on handover.

Average payment during construction: about AED 92,000 every three months. The risk is not that payment but the final line: 40% of the price must be available by handover, whether or not you have sold anything in Russia. The rule is simple: if you do not have the money or an approved mortgage for the final payment, choose a plan with a smaller final balance or a property closer to completion.

Additional costs

No payment plan includes government fees. Remember these three figures:

Where your money is held while the property is being built

Not with the developer. Buyers' money goes into a bank escrow account, and the developer draws it down in stages against verified construction milestones. An escrow account is opened for a specific project, and each project has its own. Our catalogue listings name the escrow bank directly on the project page.

The first thing to ask the seller is which bank holds the project's escrow account and whether the developer has permission to sell. Both answers must be in writing.

What happens if you miss a payment

The schedule is part of the contract, and missing a payment is not a minor formality. The usual process is written notice, time to remedy the breach, then termination with part of the amount paid withheld. The exact amount that may be withheld is set out in your contract, and that is the only source to rely on.

The practical takeaway: when choosing a plan, calculate not the down payment but the instalment you will need to make in a year or 18 months, when construction reaches the halfway point. This is where buyers most often run into trouble.

Payment plans for every project are listed in the catalogue: exactly as announced by the developer.