Executive Key Takeaways
- •The standard financing cap is 70% of the dwelling's value — a 30% down payment
- •Saudi first-time buyers may finance up to 90%, reducing the down payment to 10%
- •Budget for transaction costs on top of the down payment, not inside it
- •What you can borrow depends on net income after existing obligations
Start With the Down Payment, Not the Property
The Implementing Regulation of the Real Estate Finance Law caps residential financing at 70% of the dwelling's value, which puts the standard down payment at 30%. The Saudi Central Bank raised the ceiling to 90% for Saudi citizens buying a first home, bringing that down payment to 10%. On a SAR 1,000,000 property, that is the difference between SAR 300,000 and SAR 100,000 — the single largest variable in whether a purchase is possible this year or in three years.
The Cash You Need Beyond the Down Payment
Buyers routinely save the down payment and then discover the transaction needs more. Real Estate Transaction Tax applies at 5% of the transaction value — confirm in the contract which party bears it. Add brokerage where a broker is involved, documentation and registration costs, any service charges due on handover, and the cost of making the property liveable. Non-Saudi buyers in Riyadh, Makkah, Madinah and Jeddah also face REGA's 2% disposal fee on qualifying transactions.
What Your Income Actually Supports
Lenders don't finance a price, they finance a monthly payment. Your capacity is assessed against net income after existing commitments — car finance, personal finance, credit cards and any other deductions all reduce what remains. Two applicants on identical salaries can receive very different approvals for this reason alone. The Saudi Central Bank's Responsible Lending Principles set the maximum share of income that total obligations may consume, and lenders apply it as a hard ceiling rather than a guideline.
Term Length Changes the Monthly, Not the Cost
Extending the term lowers the monthly instalment and raises the total paid over the life of the finance. A longer term can be the difference between approval and rejection, but it is a trade, not a saving. Run the same property across two or three terms before deciding, and look at the total cost line rather than only the monthly figure the salesperson quotes.
Check These Before You Apply
Get pre-approval before you make offers, so you negotiate from a known budget rather than a hoped-for one. Clear or reduce small obligations first, since each one shrinks your capacity. Confirm who bears the transaction tax. Keep a reserve after closing rather than spending every riyal of savings on the down payment. And compare offers from more than one financier — terms vary more than most buyers expect.
“The bank doesn't finance the price you want. It finances what your income still carries after everything you already owe.”
Looking for Custom Real Estate Advisory?
Speak directly with Asaheeb advisors in Jeddah and Riyadh to access curated off-market deals tailored to your portfolio.