• Islamic lending

    Tailored Sharia Complaint Home Loan Solutions Owner-Occupied, 1st Home Buyers, Investment, Refinance, Consolidation, Equity Release
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  • Islamic lending

    Tailored Sharia Complaint Home Loan Solutions Owner-Occupied, 1st Home Buyers, Investment, Refinance, Consolidation, Equity Release
    Book An Appointment

A TAILORED sharia approved home loan SOLUTION THAT SUITS YOUR LENDING REQUIREMENTS


AT MORTGAGE SEEKERS AUSTRALIA, WE DON'T JUST OFFER LOANS, WE'RE DEDICATED TO YOUR SUCCESS. Islamic home loans, also known as Islamic mortgages are structured to ensure compliance with Sharia principles, such as the prohibition of Riba and Gharar (uncertainty or ambiguity in contracts). The financier typically retains ownership of the property throughout the lease period, and the contracts are structured to avoid the payment of interest, replacing it with rent or lease payments that contribute towards the eventual ownership of the property.
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One of the primary concepts used in Islamic home financing is "Ijarah," which translates to "leasing" in Arabic. In the context of Islamic banking and finance, Ijarah is a contract for the hiring of services or the usufruct (use) of a property, typically for a fixed period and price. This concept is adapted to create Islamic home loans that are compliant with Sharia law. In Islamic finance, Ijarah can lead to the purchase of the property, known as "Ijarah wa Iqtina" or "rent and acquisition." This involves a leasing contract of property, such as a house, where the property is leased to a client for a stream of rental and purchase payments, culminating in the transfer of ownership to the lessee. The contract must adhere to Islamic regulations, including the prohibition of charging compound interest in case of payment delays or defaults.
There are several types of Ijarah used in Islamic home financing:

1. Ijarah Thumma Al Bai' (Hire Purchase)

This is a lease-to-own arrangement where the customer leases a property and agrees to purchase it, paying in instalments until they eventually own the property outright. This involves two contracts: an Ijarah contract for leasing and a Bai contract for the eventual sale.

2. Ijarah wa-Iqtina (Lease and Ownership)

Also known as al-ijarah muntahia bitamleek, this involves both a lease contract and a sale contract. The transfer of ownership occurs as soon as the lessee pays the purchase price of the asset, which can be at any time during the leasing period.

3. Ijara Mawsoofa bi al Dhimma (Forward Ijarah)

This is a contract for leasing something not yet produced or constructed, often combined with an Istisna contract for construction. The financier finances its making, and the leasing begins after the asset is delivered.
These financial products offer a way for Muslims to finance home purchases without compromising their religious beliefs, providing an alternative to conventional mortgage systems that are based on interest payments.

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