Developer instalment plans in Egypt: how they work and what to check before the first payment

A conventional mortgage is effectively unavailable to a foreign buyer in the Sharm El Sheikh market. Its place is taken by the developer's instalment plan: you pay in parts on a schedule the developer sets, and until the last payment your relationship is with a contract, not a bank. It is a normal instrument — most purchases at construction stage in Egypt work this way — but it has its own logic, its own risks and its own questions to ask before the first payment. This article is about what an instalment plan is made of, how to read an offer of '10 % and seven years', what to check in the contract, and how to work out whether a favourable plan is becoming an expensive purchase.

What a plan is made of

Usually three parts. A down payment at signing — a share of the price. Regular payments across the term — monthly, quarterly or twice a year. And a payment on handover — sometimes none, sometimes a large one. The balance between them is the substance of the offer: the smaller the down payment, the more is generally left to the end, or the longer the term. On a property page in the Dommare catalogue we show these parameters as the developer states them — down-payment share, term, frequency — with nothing recalculated.

The fourth part, mentioned less often, is the price. The same unit often has one price for full payment and another on instalments: an 'interest-free' plan means the interest is already inside the price. That is not deceit but packaging, and the comparison to make is not schedule against schedule but the full instalment total against the price for paying at once.

How to read an offer

• '10 % down' — of which price: discounted or not, with or without the compulsory fees.
• 'Seven-year plan' — from signing or from handover; if the building is delivered in three years, you spend four years paying for a flat you live in — a different situation.
• 'Interest-free' — compare the full total with the price for full payment: the difference is the interest.
• 'Payment on handover' — how much and by what date; whether a construction delay moves it.
• 'Service charge and maintenance' — from when you pay: handover, signing or a date the developer sets.
• 'Fixed price' — for the whole term or with indexation; in hard currency or in pounds.

What to ask before the first payment

1. What happens on a late payment: grace period, penalty, termination — and how money already paid is returned. The key clause of the contract, and a lawyer reads it.
2. When you acquire rights to the property and which — at signing, at the last payment, at registration. Lawyer.
3. Whether the balance can be settled early and whether the price changes if it is.
4. Whether the contract can be assigned to another buyer before handover and on what terms — your exit if plans change.
5. What happens if the developer delivers late: whether your payments pause, whether there is compensation.
6. In which currency and how to pay from abroad: bank, details, confirmations, who bears the fees.
7. What exactly you are buying — a unit in the residential or the hotel part, under what rules.
8. How this developer's delivered schemes in town look and what their residents say about dates and quality.

The answers belong to the contract, not to the brochure or the sales manager. An answer that exists only verbally does not exist.

Instalments on construction and on ready property

Most often instalments are offered at construction stage: the developer needs your payments to build. That means you carry the construction risk and the schedule risk at once: you pay for what does not yet exist and must keep paying whatever happens on site. Instalments on ready homes are rarer and shorter — usually a year or two on the balance — but you see what you are paying for and can move in. On the resale market an instalment from a private seller is rare and a separate conversation with a lawyer.

How to work out whether a plan pays

Add up every payment on the schedule — down payment, regular payments, handover payment, charges that start before handover — and compare with the price for full payment. The difference is the cost of the plan over its term. Add what you would lose or earn on the money that stays with you rather than going to the developer. And judge honestly what your income will be in three years: an instalment plan is an obligation, not an option. The payment-plan calculator on Dommare lays the stated schedule out by date and totals it from your own figures; it does not advise, it shows.

Red flags

• A very small down payment and a very large handover payment from a developer with no delivered schemes.
• A schedule in the contract that differs from the schedule in the brochure.
• No clause on late delivery — only on your late payments.
• Cash payments without receipts, or payments to an individual's account.
• Pressure that 'the price holds until Friday': a normal plan lives longer than a week.
• Refusal to give the contract to a lawyer for a few days before signing.