Islamic Mortgage Calculator
Compare payment visibility for Diminishing Musharaka, Murabaha, and Ijarah home finance structures.
For Murabaha flat-rate mode this is simple markup per year, not reducing balance interest.
Murabaha markup
Fees and events
- Provider-funded amount
- £240,000.00
- First monthly payment
- £1,800.00
- Last monthly payment
- £803.33
- Total rent/profit
- £150,500.00
- Total paid to provider
- £390,500.00
- Payoff month
- 300 of 300
Diminishing Musharaka guidance
Co-ownership where your monthly acquisition increases your share while rent is charged on the provider share that remains.
- Provider-funded amount is property price minus deposit.
- Rent/profit is shown separately from acquisition and fees wherever the model allows it.
- Use the schedule to inspect cash flow, equity growth, payoff timing, and reset effects month by month.
Calculator guide
How this islamic mortgage works
This calculator models three common Sharia-compliant home finance structures side by side. Diminishing Musharaka is treated as a co-ownership arrangement: the provider funds part of the property, you acquire that share over time, and rent is charged only on the provider share that remains. Ijarah is modelled as a lease-to-own style schedule with the same declining provider share and a final transfer event at payoff. Murabaha is modelled as a fixed cost-plus sale where the provider sale price is set upfront and repaid over the term.
Use the payment mode control to choose how Musharaka and Ijarah should behave. Level acquisition pays the same acquisition amount each month, so the rent portion falls as the provider share reduces. Level total payment uses an annuity-style payment to keep the headline payment broadly stable, with the acquisition portion increasing as the rent portion falls; if you add a reset month, the payment is recalculated for the remaining term.
The comparison is designed for payment visibility, not product recommendation. Fees, takaful, maintenance, extra acquisition payments, one-off events, and rate resets can be included so you can see how cash flow and provider share change month by month before reviewing actual provider illustrations and Sharia board documentation.
Methodology and sources
Last reviewed:
For Diminishing Musharaka level acquisition, the financed amount is divided evenly across the term as the base acquisition amount. Monthly rent is calculated on the opening provider share using annualRatePercent / 12, then the provider share is reduced by acquisition and any extra acquisition payments.
For Diminishing Musharaka level total payment, the calculator uses the standard annuity payment formula on the current provider share and remaining term. Rent is calculated on the opening provider share; acquisition is the residual part of the fixed payment. If a reset month is entered, the payment is recalculated from that month using the new rate and remaining term.
Murabaha is modelled as a fixed cost-plus sale price. In flat-rate mode, markup equals financed amount times annual rate times term in years. In fixed-markup mode, the entered markup is added directly. The sale price is then split into equal monthly principal and profit components, with final-month rounding adjustment.
Ijarah is modelled like level-acquisition Musharaka for payment visibility: acquisition reduces the provider share, rent is charged on the opening provider share, and the final row marks the transfer event. Actual legal title and purchase undertaking terms depend on the provider contract.
Assumptions
- The calculator is a payment-visibility model only and does not determine whether a product is Sharia-compliant.
- Provider-funded amount is property price minus deposit; taxes, valuation costs, conveyancing, stamp duty, and affordability checks are outside scope.
- Fees entered are added to visible cash flow but are not used to change ownership shares unless entered separately as extra acquisition.
- Rate resets apply only to Musharaka and Ijarah. Murabaha remains fixed because its cost-plus sale price is set upfront in this model.
- Saved share links persist only the scenario inputs in the backend and contain no personal identity or contact information.
Sources
Islamic home finance results are illustrative only. They are not a finance offer, affordability assessment, Sharia ruling, legal advice, tax advice, or recommendation. Confirm all figures and Sharia governance with the provider.
Spot a methodology issue? Send a correction.
Frequently asked questions
Is this the same as a conventional mortgage calculator?
No. A conventional mortgage calculator usually models interest on a loan balance. This calculator separates provider share acquisition, rent or profit, fees, and transfer timing so the cash flow can be inspected against common Islamic home finance structures.
Which model should I choose?
Use Compare models first, then inspect the structure named in the provider illustration. The calculator does not recommend one structure over another because suitability, cost, eligibility, and Sharia governance depend on the provider documents.
Why does level acquisition start higher and end lower?
The acquisition amount is constant, but rent is charged on the provider share that remains. As your share grows, the rent portion falls, so total payment declines over the term.
Why does Murabaha ignore rate resets?
In this model, Murabaha fixes the cost-plus sale price upfront. Once the sale price is set, later rate resets do not change the schedule unless the provider contract says otherwise.
Are saved scenarios private?
Saved scenarios store only the calculator inputs needed to reopen the page. Do not enter personal names, addresses, account numbers, or provider reference numbers into shared notes or assumptions.
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