An Islamic mortgage, also known as a Sharia-compliant mortgage, follows Islamic principles that prohibit paying or receiving interest (riba). Instead of borrowing money and repaying it with interest, Islamic mortgages use different structures, such as Ijara (lease-to-own), Murabaha (buy-and-sell), or Musharaka (partnership).

The lender either buys the property and leases it to you, or they buy it and sell it to you at a profit, or the bank and the buyer jointly purchase the property, and ownership is gradually transferred to the buyer as they make payments

These mortgages are designed for Muslims who wish to adhere to their faith while purchasing a home without incurring interest.

How does an Islamic mortgage work?

In an Islamic mortgage, the bank either buys the property and leases it to you (Ijara), buys and sells it to you at a profit (Murabaha), or enters a partnership (Musharaka), where ownership transfers as you make payments, avoiding interest.

Who can apply for an Islamic mortgage?

Anyone can apply for an Islamic mortgage, regardless of faith, if they prefer an interest-free financial structure. These mortgages are popular among those wanting to follow Islamic financial principles.

Are Islamic mortgages more expensive than conventional ones?

Islamic mortgages might have higher fees or payments compared to conventional ones due to their unique structure, but they offer an interest-free way to finance property, aligning with religious beliefs for many.