Off-plan property refers to purchasing a unit before it is constructed or fully completed. This model has gained increasing popularity in Riyadh because of Vision 2030 and the rise of mega-developments such as Qiddiya, Diriyah Gate, and the King Salman Park project. Its benefits outweigh any ready property lower upfront costs, flexible payment plans, and early access to high-growth locations.
In a hot market like Riyadh, access to financing can make the biggest difference. You could either be landing a great deal and being priced out. But it’s not just about getting your financing options approved. It’s actually about how the financing is structured and what kind of rate you agree to.
A Walkthrough of How to Get Financing in Riyadh:
Lux Aura is with you throughout every step of the financing and purchasing process.
Who Can Finance You?
You’ll generally get off-plan financing through one of the following:
Either Islamic banks in Saudi Arabia (like Riyad Bank, Al Rajhi, Samba, Banque Saudi Fransi), government programs (for citizens, for example, Sakani Program) or developers working with partner banks (like Luxaura Realty, who can facilitate pre-approved financing with banks)
However, if you’re a foreign investor, some banks offer investment-focused mortgages or partner with real estate developers to allow international buyers. This is where Lux Aura comes in to assist you and finding the developers and financial institutions in particular that provide these services.
Check Developer & Project Eligibility
Before applying for any financing, check with your agency whether the developer is eligible for financing or not. Rest assured that Lux Aura only connects you with developers that meet all the eligibility criteria.
Confirm the developer (like those listed by Luxaura Realty) is:
- Registered under Wafi
- Has an approved off-plan sales license
- Has bank partnerships for stage-wise financing
An important thing to note is that banks won’t finance unlicensed projects it’s required that the project is listed under the Wafi program.
Choose Your Sharia-Compliant Financing Model
Banks in Riyadh use Islamic financing structures:
Murabaha (Fixed-rate)
In this case, the bank buys the property and sells it to you at a fixed profit. You pay in monthly installments. It is more predictable, safer from variable rate shocks
Ijara (Lease-to-own)
The bank leases the property to you, and you become the owner after full payment. Profit margin may be tied to SAIBOR (Saudi Interbank Offered Rate), which fluctuates quarterly. One pain point, which we will be discussing further in this article, is that it can lead to unpredictable payments.
The Problem: Variable Rates
One problem that is faced by many is that Most buyers in Riyadh are offered variable-rate home finance, especially under Ijara, which basically means lease-to-own agreements. These rates are tied to SAIBOR (Saudi Interbank Offered Rate), which changes every 3 months. That means your monthly payments can rise suddenly, even if your income stays the same. As reported by Arab News, rapid changes and fluctuations in the rates offered for ROI have become a growing concern for investors in 2024–25.
In this Guide,
We will help you understand the basics of Riyadh off-plan financing, including the bank products available. With the experts at Lux Aura, you will learn how different financing types (like Murabaha and Ijara) affect your repayment terms. Along with that, you will also discover how Lux Aura Realty helps buyers protect themselves from rate shocks, negotiate better terms, and stay compliant with Wafi regulations.
Fixed vs. Variable Profit Rates
The variable profit is Ijara-Based: Profit margin is linked to SAIBOR, which updates quarterly. Payments can fluctuate even if you’ve locked in the property price. Risk: You may start at SAR 4,000/month and end up at SAR 5,000/month within 18 months if SAIBOR spikes.
Fixed profit is usually Murabaha-Based. Profit is agreed upfront and does not change, regardless of market trends. Best for buyers on fixed incomes or with tight budgets. Some banks may offer fixed rates for 2–5 years before converting to variable.
Wafi Regulatory Regime
Wafi is the Saudi Ministry of Housing’s system that regulates off-plan projects. It ensures projects are legally registered, have approved architectural plans, and that developer funds go into escrow accounts. Banks will only finance off-plan properties that are Wafi-approved.This protects the buyer from fraud or project delays due to missing legal documents. Lux Aura Realty only deals with projects that have full Wafi and municipal NOCs, ensuring our clients’ financing process goes smoothly and securely.
Comparing Bank Offers to Finally Decide:
What metrics should you consider?
- What’s the profit rate? Is it fixed or variable?
- What is the down payment required? Is it the usua 20%–30%? Or more?
- How long is the loan duration (15–25 years is the typical offer)? Does your income allow you to pay it off within that time line?
- What are the fees (admin fees, insurance, early payment penalties)?
Tip: Ask for a repayment simulation to understand how much your monthly payments may change if SAIBOR goes up.
The conclusive steps:
1) Apply Through the Developer or Directly
SO, we have the options to apply directly to a bank, or go through Lux Aura Realty or the developer’s financing desk. They often have pre-approved agreements with banks and can fast-track your application.
2) Sign the Agreement & Finalize the Payment Plan
Once the bank approves, we have the go-signal to proceed with the following steps:
You’ll sign a financing agreement (outlining profit margin, schedule, and penalties). Payments are usually tied to construction milestones (e.g., 20% on foundation, 30% on structure, etc.). Lux Aura or your developer will send payment certificates to the bank at each stage.
3) Register Your Purchase
After signing is done, we’re almost there…
The deal must be registered with the Ministry of Housing via Wafi. The property will be listed under your name (or reserved for you until handover). So now, you are officially done with all the procedures and officially own the property that is yet to yield you millions in profit.
4) Plan for Handover & Final Settlement
So years later, or after whenever the project is completed: You inspect, or as they prefer to call it, snag the property for defects. You’ll pay any remaining balance. And finally, the title deed is transferred to your name.
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