Costs of Purchasing a First Home in Saudi Arabia: Down Payment and Ratios 2026

Buying your first home starts with a figure everyone knows: the property price, followed by four figures most first-time buyers are unaware of: the down payment, the debt-to-income ratio, the real estate transaction tax, and the brokerage commission. As of the publication date of this article (July 28, 2026), the maximum mortgage financing ratio for a first home from banks is 90% of the property value, and this ratio is stipulated for citizens, meaning a down payment of no less than 10% in cash, while your monthly credit obligations must not exceed 65% of your total monthly income. The rest of this article details each item and identifies the official authority that confirms it.

This content is for general awareness purposes only and does not constitute legal, financial, or investment advice. Regulations, fees, and ratios are subject to change, and each transaction varies. Please verify with official sources (the Real Estate General Authority, the Zakat, Tax and Customs Authority, the Saudi Central Bank, Sakani) before making any decision.

How much is the required down payment for a first home?

The rules of the Saudi Central Bank set a maximum limit for the loan-to-value ratio. For a first home, this limit is 90% when financed by banks, which is stipulated for citizens. In practical terms: you need at least 10% of the property value from your own funds, paid before the financing comes into play.

The difference between a first home and subsequent ones is significant and changes the amount of cash required from you. Banks finance a second home and beyond with a maximum of 70%, meaning a 30% down payment, while real estate finance companies finance them with a maximum of 85%, meaning a 15% down payment. Therefore, the calculations for the first purchase cannot be carried over as they are to the second purchase.

Category	Maximum Financing Ratio	Down Payment
First Home for Saudi Citizens Only (Banks)	90%	10%
Second Home and Above (Banks, for All Beneficiaries)	70%	30%
Second Home and Above (Real Estate Finance Companies)	85%	15%

If you are not a Saudi citizen, do not assume the 90% ratio applies to you, as it is stipulated exclusively for citizens. Consult your financier directly about the financing ratio available for your case before making any commitment or paying a booking deposit. The ratios in the table above are sourced from the Rulebook of the Saudi Central Bank.

How to Calculate Your Debt-to-Income Ratio Before Visiting the Bank?

The debt-to-income ratio (debt burden ratio) is the ratio of your monthly credit obligations to your total monthly income. The principles of responsible individual financing stipulate that monthly credit obligations arising from financing must not exceed 65% of the customer's total monthly income.

You can easily calculate an estimate yourself in minutes before any appointment: add up your existing monthly installments (personal loans, car loans, credit cards), add the expected mortgage installment, then divide the total by your total monthly income. The result is your expected debt-to-income ratio. If it exceeds the limit, you have three realistic options: reduce existing obligations, increase the down payment to lower the financing amount and installment, or lower the maximum price range you are searching within.

Pay attention to two points that often confuse first-time buyers. First, some banks apply stricter ratios to their customers; these are individual bank policies with no regulatory cap, so rejection by one financier does not mean you are outside the regulatory limits. Second, consumer finance ratios are entirely different from real estate finance ratios and should not be confused with them; what you read about debt burden limits for personal loans does not apply to your home financing.

Who Pays the 5% Real Estate Transaction Tax?

The Real Estate Transaction Tax rate is 5% of the transaction value, and it applies regardless of the property's status, whether it is completed, under construction, or off-plan. The current law is Royal Decree M/84, effective from April 10, 2025, and its implementing regulations were issued on 24/03/2025. Legally, the transferor, i.e., the seller, is responsible for paying the tax, which must be paid before or during the transfer of ownership.

The First Home Is Not Exempt

This is the most common misconception. The first home is not included in the exemptions; rather, the Ministry of Municipalities and Housing bears the tax on behalf of the citizen for the first one million riyals of the first home's value, up to a maximum of 50,000 riyals, and the beneficiary pays any amount exceeding one million. This is done through a tax assumption certificate issued via the Sakani platform.

The difference between "exempt" and "borne by the state for the first million" is a real cash difference in your budget if the home price exceeds one million riyals. Check the service details and terms via the Sakani platform, and the tax provisions via the Zakat, Tax and Customs Authority, before finalizing your budget figure.

Is the 2.5% Brokerage Fee a Legal Cap?

No. The 2.5% is a default statutory rate that applies automatically in the absence of a written agreement to the contrary, and it is not a maximum cap that prevents agreeing on a different rate. The law stipulates that the fee is set at 2.5% of the transaction value if it is a sale, and of the first year's rent only if it is a lease, unless the parties to the brokerage contract agree in writing to the contrary.

What this means for you in practice is that the fee is a clause to be agreed upon in writing at the beginning of the engagement, not a figure that appears at signing. Ask about it in the first meeting.

Three provisions related to the fee protect you:

• The brokerage contract must be in writing, and the broker must deposit a copy with the Real Estate General Authority; the contract cannot be invoked otherwise.
• The brokerage contract period is 90 days from the date of its conclusion, unless another period is agreed upon.
• Licensing is mandatory; practicing brokerage or providing real estate services is not permitted except with a license from the Authority.

These provisions are stipulated in the Real Estate Brokerage Law issued by Royal Decree M/130 and its Implementing Regulations. To verify the license of the party you are dealing with, please refer to the Real Estate General Authority portal.

What are the conditions for housing support, and how does it affect your calculations?

The essential condition for eligibility is that neither the applicant nor any family member owns suitable housing at the time of application and until the support contract is signed, and that none of them has owned one during the year preceding the application, unless the housing was lost due to force majeure. In other words, selling an existing home just a few months before applying does not automatically open the door to eligibility.

Types of support are diverse and not limited to loans: a housing unit, residential land, a housing loan, housing finance provision support, and ownership pathways. Each type has a different impact on your financial calculations.

There are three repayment-related figures that should be factored into your planning from day one:

• The monthly installment is determined at a rate of 33% of the applicant's income.
• The repayment period does not exceed 25 years.
• The applicant's age must not exceed 65 years at the end of the repayment period.

The last figure specifically concerns those who start later: every additional year of your age shortens the maximum repayment period available to you, a shorter period increases the monthly installment, and a higher installment increases your deduction ratio. The three figures are interconnected and should not be read in isolation.

Do not base your budget on support amounts circulating in social media groups. Verify your eligibility and the actual value you are entitled to via the eligibility check service on the Sakani platform, as it is the authoritative source for this information.

What are the clearance and property transfer fees?

You will not find a figure here. The clearance and property transfer fees are among the items we have not been able to confirm from an official source as of the publication date of this article. Leaving this field blank while directing you to the relevant authority is more beneficial than providing a number that merely embellishes the table but contradicts reality on the day of documentation.

What you should do instead: Request a written statement from the financier and the competent documentation authority detailing all fees and expenses associated with completing the transaction before signing, and keep a copy. Any amount mentioned verbally and not reflected in a written document is unconfirmed and should be excluded from your budget until it is documented in writing.

What is the sequence of steps before you start your search?

1. Calculate your current deduction ratio yourself, and estimate the maximum monthly installment you can truly afford.
2. Verify your eligibility for housing support via the Sakani platform before taking any other step.
3. Request a preliminary estimate of the financing amount from the financier, and then set your price ceiling based on it, not the other way around.
4. Allocate the down payment in cash and set it aside; do not include it in any amount you plan to borrow later.
5. Agree on the commission in writing and stipulate it in a written brokerage contract.
6. Verify the license of the party you are dealing with via the Real Estate General Authority portal before paying any amount.

Once your figure is finalized, the next phase begins: choosing the district and the developer, which we have covered in the Guide to Choosing the District and Developer in Riyadh. If your choice is an off-plan unit, the purchasing process and its regulatory protection are entirely different, and you can find them in the Off-Plan Buying Guide in Saudi Arabia.

The Role of Railest Global

Most of the time spent buying your first home isn't spent viewing units, but rather crunching the numbers beforehand: an accurately calculated deduction rate, a down payment prepared in advance, a written breakdown of fees requested upfront, and licenses verified before payment, not after. This work isn't glamorous, but it is what separates a deal that goes smoothly from one that stalls at the documentation stage.

At Realist Global, we focus specifically on this exact part: identifying what you need to verify, which official authorities to consult, and which projects fit your financial bracket once it is finalized. Browse the available projects when you are ready to compare, or start asking your questions through Ask Fahem if you are still in the number-crunching phase.