20/80 or 1% monthly: choosing a payment plan in Dubai

When you buy off-plan in Dubai, the payment plan matters almost as much as the price. Two structures come up again and again: the classic 20/80 and the newer 1% monthly plans. Here is how each one works and who it tends to suit.

The 20/80 plan

A 20/80 plan is simple: you pay 20% of the price during the purchase process — usually a booking amount plus instalments linked to construction milestones — and the remaining 80% in one payment at handover.

The advantage is that your monthly commitment during construction is low or zero. The challenge is the end: you need the full 80% ready when the keys are handed over, either in cash or through a mortgage. Buyers who choose this plan usually have strong savings, expect a bonus or asset sale before handover, or plan to finance the balance with a bank loan.

The 1% monthly plan

A 1% monthly plan spreads the cost across the construction period. A typical structure looks like this: 10% at booking, 10% when you sign the sale and purchase agreement, then 1% of the price every month during construction, with the balance — often around 50% — due at handover.

The attraction is obvious: the monthly payments are predictable and relatively small, which makes the property accessible without a large lump sum at the start. The trade-off is that money leaves your account every month for years, and the handover payment is still substantial.

Cash upfront and cash tied up

With 20/80, the cash you need upfront is moderate, but the handover bill is very large. With 1% monthly, the upfront cash is lower and spread out, but your money is committed month after month, and missing payments can put the contract at risk. Before choosing, be honest about your income stability over the whole construction period, not just this year.

The costs on top of the price

Whichever plan you choose, the price is not the whole cost. The Dubai Land Department charges a 4% registration fee when the contract is registered, and each developer has its own administrative fees for booking, contract issuance and later transfers. Ask for the full fee list in writing before you pay the booking amount.

Who does each plan suit?

A 20/80 plan often suits buyers with strong savings who want minimal monthly commitments and are confident about the final payment. A 1% monthly plan often suits salaried buyers who prefer steady, predictable payments and want to keep their savings liquid. Neither is universally better — the right plan is the one that matches your cash flow.

One important caution

Payment plans and prices vary from project to project and can change. The examples above are common structures, not a quote. Always confirm the exact plan, the dates and every fee directly with the developer before you sign, and read the payment schedule inside the sale and purchase agreement carefully.

If you would like help comparing the plans on a specific unit, browse our properties and send us an enquiry — we will walk you through the numbers for the project you are considering.