Calculate halal home financing with no riba (interest). Supports Murabaha, Diminishing Musharakah, and Ijarah modes across 8 currencies.
Murabaha — The bank purchases the property and sells it to you at a pre-agreed marked-up price, payable in fixed installments. The profit is disclosed upfront and does not compound.
Diminishing Musharakah — You and the bank jointly own the property. You gradually purchase the bank's share while paying rent on the portion still owned by the bank, until full ownership transfers to you.
Ijarah (Lease-to-Own) — The bank buys the property and leases it to you for an agreed term. You pay rent throughout the period, and ownership transfers to you at the end.
Results are estimates for planning purposes only. Actual terms, profit rates, and conditions vary by financial institution and country. Please consult a certified Islamic finance advisor or your bank before making any financial decision.
Understanding Islamic home financing
Islamic mortgages are Sharia-compliant alternatives to conventional home loans. They avoid riba (interest), which is prohibited in Islam, and instead use trade, leasing, or partnership structures to facilitate home ownership.
Murabaha
The bank buys the property outright and sells it to the buyer at a higher price, with the profit margin agreed upfront. The buyer repays in equal installments over the agreed period. Because the price is fixed at the start, there is no compounding — making it one of the most transparent Islamic finance structures.
Diminishing Musharakah
This is the most common Islamic mortgage structure in Pakistan, the UK, and Malaysia. The bank and buyer co-own the property from day one. The buyer pays monthly rent (for the bank's share) plus a portion to buy out the bank's equity. As the bank's ownership shrinks, the rent component decreases — making payments more equitable over time.
Ijarah (lease-to-own)
The bank purchases the property and leases it to the buyer for a fixed term. Monthly rent is paid throughout the period. At the end of the contract, ownership is transferred to the buyer via a separate gift or sale agreement at a nominal value. Ijarah is widely used in GCC countries and Malaysia.
Frequently asked questions
In a Murabaha arrangement, the bank purchases the property on your behalf and resells it to you at a higher, pre-agreed price payable in installments. The profit margin is fixed upfront and does not compound, making it fully Sharia-compliant.
In Diminishing Musharakah, you and the bank co-own the property. You make regular payments to buy out the bank's share gradually, while also paying rent on the portion still owned by the bank. Over time your ownership increases until you own 100% of the property.
Ijarah is a lease-to-own arrangement. The bank buys the property and leases it to you for a fixed term. At the end of the lease period, ownership transfers to you. You pay rent instead of interest, and the rent amount is agreed upfront — no surprises.
Islamic mortgages can have slightly higher total costs in some markets due to the bank's additional transactional steps. However, the total profit paid is fixed and transparent from the start — unlike conventional loans where interest compounds over time and can balloon unpredictably.
This calculator supports PKR (Pakistani Rupee), USD (US Dollar), AED (UAE Dirham), GBP (British Pound), SAR (Saudi Riyal), BDT (Bangladeshi Taka), INR (Indian Rupee), and MYR (Malaysian Ringgit).
Minimum down payment requirements vary by country and institution, typically ranging from 10% to 30%. In Pakistan, Islamic banks generally require 20–30%. You can adjust the down payment percentage in this calculator to see its direct impact on your monthly installment.