Murabaha Mortgages

For this type of mortgage, you are required to have a fair amount of capital to start with as you must pay a percentage of the property’s value upfront (deposit).

Once the payment is paid, however, the property is registered in your name and officially belongs to you. The repayment period and monthly repayment amounts are agreed between you and the lender and remain fixed for the term of the mortgage.

The maximum repayment term is 15 years, and the loan can be paid off at any point without incurring a penalty charge.

How does a Murabaha mortgage work?

When you find a suitable property that you wish to buy, you agree a purchase price with the vendor as normal. You then apply for a Murabaha mortgage and agree repayment terms with your lender.

The property will be purchased by your lender who will then sell it back to you immediately at a slightly higher price that is determined by the original value of the property, the length of repayment term and the percentage you have agreed to pay as a deposit (typically 20% of the purchase price). The property is then registered in your name and you pay the deposit.