Islamic Home Financing
Plan a Shariah-compliant home purchase with Diminishing Musharakah. See your monthly installment, total rent and a year-by-year schedule of how your ownership grows to 100%.
PKR 2 Crore
You pay PKR 40 Lakh upfront · bank finances PKR 1.6 Crore
Monthly installment
Rs 281,007per month for 180 monthsOwnership (principal)Rent (profit)
| Year | Rent paid | Ownership bought | Bank share left | You own |
|---|---|---|---|---|
| Year 1 | 3,183,315 | 188,774 | 15,811,226 | 21% |
| Year 2 | 3,141,900 | 230,190 | 15,581,036 | 22% |
| Year 3 | 3,091,398 | 280,691 | 15,300,345 | 23% |
| Year 4 | 3,029,817 | 342,272 | 14,958,072 | 25% |
| Year 5 | 2,954,725 | 417,364 | 14,540,709 | 27% |
| Year 6 | 2,863,159 | 508,930 | 14,031,779 | 30% |
| Year 7 | 2,751,505 | 620,584 | 13,411,194 | 33% |
| Year 8 | 2,615,354 | 756,735 | 12,654,459 | 37% |
| Year 9 | 2,449,333 | 922,756 | 11,731,703 | 41% |
| Year 10 | 2,246,889 | 1,125,201 | 10,606,502 | 47% |
| Year 11 | 2,000,030 | 1,372,060 | 9,234,443 | 54% |
| Year 12 | 1,699,012 | 1,673,077 | 7,561,366 | 62% |
| Year 13 | 1,331,954 | 2,040,135 | 5,521,230 | 72% |
| Year 14 | 884,366 | 2,487,723 | 3,033,507 | 85% |
| Year 15 | 338,582 | 3,033,507 | 0 | 100% |
Estimate for planning only. It excludes processing fees, takaful and any change in a floating rent rate. Confirm the exact figures with your Islamic bank.
1. Joint ownership
You and the bank buy the home together. Your down payment is your share; the bank owns the rest.
2. Rent on the bank’s share
You live in the home and pay rent only on the part the bank still owns. As its share shrinks, so does the rent.
3. Buy the bank out
Each installment also buys a slice of the bank’s share until you own 100% of the property.
Questions
Instead of a loan with interest, you and the bank co-own the property. You pay rent on the bank’s share and gradually buy that share, so the bank earns rent rather than interest.
Banks usually fix a level installment. As the rent portion falls each month, a larger part of the same installment goes towards buying the bank’s share.
Usually not. Most Islamic banks in Pakistan link the rent rate to KIBOR and revise it periodically, so the installment can change.
Processing fees, valuation and legal charges, takaful (Islamic insurance) and property taxes are extra. Ask your bank for a complete cost sheet.