5 Mistakes First-Time Home Buyers Make

Mistake 1: Ignoring Additional Costs

The property price isn't the only cost. There's the valuation fee (SAR 3,000), broker commission (2.5%), mandatory insurance, and 15% VAT on fees.

Mistake 2: Not Checking Sakani Eligibility

Many first-time buyers don't know they qualify for REDF subsidy. If your salary is ≤ SAR 14,000, you could save up to 31% on your monthly installment.

Mistake 3: Choosing the Longest Term Possible

A 30-year term means a lower payment, but much higher total finance cost. Compare: a SAR 1M mortgage at 5.49% over 25 years costs SAR 756,000 in interest. The same mortgage over 15 years costs SAR 414,000 — saving SAR 342,000!

Mistake 4: Not Comparing Banks

A 0.5% rate difference may seem small, but over 25 years it equals tens of thousands of riyals. Compare at least 3-4 banks.

Mistake 5: Forgetting About Debt Burden Ratio

Even if the bank approves you, if your DBR is above 55% you'll be financially stretched. Target below 40% for peace of mind.