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Islamic Mortgage Calculator | Compare Shariah Mortgage Payments

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Calculates monthly payments, total cost and the rent-versus-equity split for the three main Shariah-compliant home finance models — Diminishing Musharakah, Ijara wa Iqtina and Murabaha.

Last updated: June 2026 · Free · No sign-up required

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Most halal finance products require 15–25% down.

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Guidance Residential, Al Rayan and Gatehouse publish current rates.

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Results

Enter values above and click Calculate to see your result instantly.

Halal home finance replaces the interest-bearing loan with a traded or co-owned asset: in a Diminishing Musharakah the provider buys most of your home with you, charges rent on its shrinking share, and sells you that share month by month; Ijara wa Iqtina leases the home to you with ownership at term; Murabaha resells it to you at a fixed, up-front markup. This calculator prices all three.

Enter the home price, down payment, term and the provider’s profit rate to get the monthly payment, total cost, provider profit — and, for musharakah, how the first payment splits between rent and your own equity. Typical providers (Guidance Residential, Al Rayan, Gatehouse) ask 15–25% down; use their published profit rates for a realistic quote.

Quick reference

$400k home, 20% down, 5.5%MonthlyTotal paymentsProvider profit
Diminishing Musharakah, 25 yr$1,965.08$589,524$269,524
Diminishing Musharakah, 15 yr$2,614.85$470,673$150,673
Murabaha, 25 yr$2,533.33$760,000$440,000
Conventional 5.5% APR, 25 yr$1,965.08$589,524$269,524 (as interest)

info Islamic Mortgage Calculator (Halal Home Finance)

Free islamic calculator — enter your numbers and get an instant, accurate result.

info Private by design

Everything runs locally in your browser. No uploads, no accounts, no tracking.

info Works everywhere

Fully responsive and mobile-friendly — calculate on any device, any time.

info Educational

Includes the formula and step-by-step explanation so you understand the math, not just the answer.

Interpretation guide

ModelHow it works
Diminishing MusharakahBank co-owns the home; each payment = rent on its share + buying more of it. Most common in the US/UK
Ijara wa IqtinaLease-to-own: you rent the whole property and acquire it at term — same declining-balance math
MurabahaBank buys the home, resells to you at a fixed markup — total cost is locked on day one
Rent vs equity splitEarly payments are mostly rent; the equity share grows every month

lightbulb Worked example

Let's say you are using the Islamic Mortgage Calculator (Halal Home Finance). Calculates monthly payments, total cost and the rent-versus-equity split for the three main Shariah-compliant home finance models — Diminishing Musharakah, Ijara wa Iqtina and Murabaha. Enter the values that match your situation into the input fields and press calculate — using realistic numbers makes the result directly useful for you.

Result: The calculator instantly applies the formula Musharakah/Ijara: M = P·r ÷ (1 − (1+r)⁻ⁿ); first rent = balance × rate ÷ 12; Murabaha: total = P × (1 + rate × years) and returns the result with appropriate precision.

What this means: Read the result in the context of what you are measuring. The step-by-step breakdown lets you confirm the math and understand which input most affects the outcome.

Formula & methodology

Formula: Musharakah/Ijara: M = P·r ÷ (1 − (1+r)⁻ⁿ); first rent = balance × rate ÷ 12; Murabaha: total = P × (1 + rate × years)

The Islamic Mortgage Calculator (Halal Home Finance) is built on a well-established calculation method. It uses the formula Musharakah/Ijara: M = P·r ÷ (1 − (1+r)⁻ⁿ); first rent = balance × rate ÷ 12; Murabaha: total = P × (1 + rate × years) to turn your inputs into a reliable result. Calculates monthly payments, total cost and the rent-versus-equity split for the three main Shariah-compliant home finance models — Diminishing Musharakah, Ijara wa Iqtina and Murabaha. The steps are shown on the page so you can follow the reasoning from input to output.

  1. Enter the home price, down payment (most providers want 15–25%), term and the provider's profit rate.
  2. Pick the model: Diminishing Musharakah and Ijara use declining-balance math; Murabaha uses a flat cost-plus markup.
  3. Read the monthly payment, total cost, provider profit, and — for musharakah — the first payment's rent/equity split.

Worked example: $400,000 home with $80,000 down at 5.5% over 25 years (Diminishing Musharakah): $1,965.08/month. The first payment splits into $1,466.67 rent on the bank's $320,000 share and $498.41 equity purchase; total cost of the home is $669,524 including the down payment.

Authoritative source: Islamic Relief

Frequently asked questions

How is an Islamic mortgage different from a normal mortgage?
No money is lent at interest. In Diminishing Musharakah the bank co-owns the home and charges rent on its diminishing share while you buy it out; in Murabaha it resells the home to you at a fixed markup. Payments can match a conventional loan — the contract and risk allocation differ.
Why do Islamic mortgage payments look like conventional ones?
Providers benchmark profit rates to the same market that prices conventional loans, and declining-balance arithmetic is identical. What changes is what you pay for: rent and equity in a co-owned asset, not interest on debt.
How much down payment do halal home finance providers require?
The Islamic Mortgage Calculator (Halal Home Finance) is free, private, and accurate: it runs entirely in your browser (no uploads, no accounts), applies the standard calculation, and explains each step so you can verify the result. Calculates monthly payments, total cost and the rent-versus-equity split for the three main Shariah-compliant home finance models — Diminishing Musharakah, Ijara wa Iqtina and Murabaha. There is no limit on usage, and it works on any device.
Which is better: Musharakah, Ijara or Murabaha?
Diminishing Musharakah dominates in practice because rent falls as your equity grows and early buyout is clean. Murabaha locks the total cost up-front — predictable, but usually more expensive over long terms since profit is flat on the full amount. Ijara (pure lease) suits those who want no ownership during the term. The calculator models all three so you can compare.
Is an Islamic mortgage really halal?
Shariah-compliant home finance avoids charging interest and instead uses trade or partnership structures: Diminishing Musharakah (shared ownership with rent and buyout), Ijara (lease-to-own), or Murabaha (cost-plus sale). Whether a specific product is halal depends on the contract's compliance — genuine asset involvement, no penalty interest, and proper ownership transfer. This calculator models the three main structures so you can compare them.
What is the difference between Diminishing Musharakah and Murabaha?
In Diminishing Musharakah you and the bank co-own the property: you pay rent on the bank's share plus buy-out installments, and your ownership grows each month. In Murabaha the bank buys the property and resells it to you at a fixed markup, repaid in equal installments with no rent component. Ijara wa Iqtina is a lease ending in ownership transfer. The calculator models all three so you can compare total costs.
How is the monthly payment worked out for Diminishing Musharakah?
It uses the amortizing formula M = P·r ÷ (1 − (1+r)⁻ⁿ) — structurally the same math as a conventional mortgage — where each payment splits into rent on the bank's remaining share (balance × rate ÷ 12) and equity purchase. Early payments are mostly rent; later ones mostly equity. For Murabaha it is simpler: total = P × (1 + rate × years), divided into equal installments.
Are the results certified as Shariah-compliant?
No — the tool computes the payment math for the three common structures, but Shariah compliance depends on the actual contract terms, scholars' rulings, and your provider. Different scholars and banks structure these products differently. Always confirm the specific product with a qualified scholar and read the contract before committing.
Why does the 'rate' look like an interest rate if there is no interest?
The rate is a rental or profit rate used to compute payments — economically it behaves like interest in the formula, which is why the Musharakah/Ijara math mirrors a conventional amortization. The Shariah distinction lies in the contract structure (rent and co-ownership rather than a loan), not in the arithmetic. The calculator shows the rent-versus-equity split so you can see where each payment goes.

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