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Is buying a house with a mortgage halal? What is Islamic home finance?

A conventional mortgage is an interest-bearing loan, which is the definition of riba. The Islamic alternatives restructure the transaction so the financier owns the asset.

Two structures are used in Australia:

  • Ijara - the financier buys the property and leases it to you, with your payments split between rent and a growing ownership share
  • Murabaha - the financier buys the property and sells it to you at a disclosed mark-up, payable over time

InvestHAQ compares investment products, not home finance. This answer is here because the question is asked constantly and deserves a neutral answer.

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Factual and educational information only. Nothing on this page is financial product advice, a recommendation, or a Shariah ruling. Consider your circumstances and the product's disclosure documents, and seek licensed advice and qualified scholarly guidance before acting.

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