Developer Instalments or a Mortgage? Comparing the Real Cost in Egypt
If you can pay only part of an apartment's price up front, you usually choose between a developer instalment plan and a mortgage from a bank or mortgage finance company. Neither is always cheaper. Developers rarely call it interest, but the gap between the cash price and the instalment price is a hidden financing cost you can calculate. A mortgage states its rate openly, runs longer, and comes with income and collateral rules.
How the two options differ
| Item | Developer instalments | Mortgage |
|---|---|---|
| Lender | The developer, via a cheque schedule | A regulated bank or mortgage company |
| Financing cost | Built into the unit price | Stated interest rate |
| Proof of income | Usually lighter | Required, with an instalment-to-income cap |
| Collateral | Cheques and the sale contract | The property itself |
The rules for mortgage companies
Mortgage finance in Egypt is governed by Law 148 of 2001 and Financial Regulatory Authority rules. As reported by Al Mal in July 2026, existing limits for mortgage finance companies include financing of up to 90% of a residential unit's value for individuals (up to 100% under leasing), a maximum instalment of 50% of the borrower's income, and up to 80% for non-residential property. Each lender may apply stricter terms, and banks follow their own rules.
Step 1: find the hidden rate in the developer offer
A fully hypothetical example: cash price EGP 2,000,000; 10% of the instalment price as down payment; the rest over 72 equal monthly payments.
| Instalment price (EGP) | Down payment (EGP) | Monthly (EGP) | Implied annual rate (approx.) |
|---|---|---|---|
| 2,200,000 | 220,000 | 27,500 | 3.6% |
| 2,400,000 | 240,000 | 30,000 | 7.0% |
| 2,600,000 | 260,000 | 32,500 | 10.3% |
Treat the cash price minus your down payment as a loan and solve for the rate that the instalments repay, for example with the RATE function in a spreadsheet.
Step 2: price the mortgage the same way
Same unit at the EGP 2,000,000 cash price, 10% down, EGP 1,800,000 financed. Rates below are hypothetical, for sensitivity only.
| Rate (hypothetical) | Term | Monthly (EGP) | Total repaid (EGP) | Income needed at 50% cap (EGP/month) |
|---|---|---|---|---|
| 18% | 10 years | 32,433 | 3,892,000 | 64,867 |
| 18% | 15 years | 28,988 | 5,217,764 | 57,975 |
| 22% | 10 years | 37,205 | 4,464,653 | 74,411 |
| 22% | 15 years | 34,304 | 6,174,649 | 68,607 |
Here the developer plan at about 10% is far cheaper overall, yet its monthly payment exceeds a 15-year mortgage's because the term is shorter. The real decision is total cost versus a monthly payment you can carry.
What the tables miss
- Handover timing: off-plan instalments may overlap with rent you still pay.
- Legal status: lenders need a unit with clear title to use as collateral.
- Extra costs: valuation, insurance and admin fees for mortgages; maintenance deposits for developer purchases.
- Default terms: read late-payment and termination clauses in both cases.
Checklist
- Get the cash and instalment prices for the same unit in writing.
- Calculate the developer's implied rate.
- Get written offers from at least two lenders.
- Size the payment to your budget, not the maximum allowed.
- Add interim rent for off-plan units.
- Review the contracts with a legal or financial adviser.
FAQ
Are developer plans really interest-free?
Rarely. If the instalment price is above the cash price, the difference is a financing cost.
How much can a mortgage cover?
Under published rules for mortgage companies, up to 90% of a residential unit's value, but each lender sets its own figure.
Can I combine both?
Some developers may accept a bank-financed handover payment. Confirm in writing with both parties before booking.
This guide is for information only and is not financial advice.
On Masari you can compare unit prices, floor plans and payment plans before contacting any seller.