What is Islamic Murabaha in property financing?

Murabaha is a Sharia contract in which the bank buys the property from the seller, then sells it to the customer with monthly installments at a fixed and pre-disclosed profit margin — without interest. It's the method used by the Saudi Islamic banks (Al Rajhi, Alinma, Albilad).

What's the difference between Murabaha and an interest-based loan?

In an interest-based loan, the customer borrows cash and returns it with variable interest. In Murabaha there is no cash loan — it's a genuine purchase-and-sale operation with a fixed profit. The monthly installment doesn't rise when interest rates move, because it isn't interest.

What's the minimum down payment?

Saudi banks typically require a 10% minimum down payment. It can drop to 5% with the Sakani government program or rise to 20% for commercial properties. The calculator lets you try different ratios to see the impact on the installment.

Is early repayment possible?

Yes. Saudi banks allow early repayment with a deduction of part of the unrealized profit margin (called ibra). Terms vary by bank — check your contract or ask the bank directly.

What's the maximum financing term?

Typically up to 30 years, with the condition that the borrower's age doesn't exceed 70 at the contract's end. The longer the term, the lower the monthly installment and the higher the total profit margin paid.

Is the Sakani government program Murabaha or a loan?

The Sakani program operates with multiple structures, but direct financing via the Real Estate Development Fund + partnered banks is usually a Sharia-compliant Murabaha with government installment support. The subsidy doesn't change the contract's Sharia nature.

What should I prepare before applying for financing?

A valid national ID, salary letter from your employer, 3-month bank statement, credit report (Simah), and details of the target property. The application itself is submitted online via the bank's app or website.

How does the Damj broker help in the financing process?

Our broker liaises with the bank on your behalf after property approval, coordinates the inspection and appraisal, follows up on title transfer, and ensures the deal closes with minimum friction. There's no fee for this service — the 2.5% brokerage is only after the sale closes.

SHARI'A · MurabahaIslamic Home FinanceEstimate

CHAPTER · Murabaha calculator

Finance your property,
Sharia-compliant.

Compute your monthly installment under the Islamic Murabaha system — the bank buys the property and sells it to you at cost plus a fixed agreed-upon profit margin. No compounded interest, no opacity.

INPUTS · Inputs

Property priceSAR 1,500,000

SAR 200,000SAR 20,000,000

Down payment20% — SAR 300,000

0% — SAR 050% — SAR 750,000

Yearly profit margin4.5% per year (fixed Murabaha)

2% per year (fixed Murabaha)8% per year (fixed Murabaha)

Financing term25 years

5 years30 years

RESULTS · Results

FINANCEDFinanced amount

SAR 1,200,000

TOTAL COSTTotal price

SAR 2,550,000

BANK PROFITTotal bank profit

SAR 1,350,000

Monthly installment

SAR 8,500

Over 300 installments (25 years)

⚖️ Sharia Murabaha: The bank buys the property from the seller, then sells it to you at cost plus an agreed fixed profit — no compounded interest, no opacity. This is an indicative calculator; final rates vary by bank (Al Rajhi, Alinma, Albilad, etc.).

Murabaha comparison

Which bank is cheapest?

Indicative comparison of home-finance offers from major Saudi banks. Numbers are estimates — for your real offer use Pre-qualify calculator.

Property price

SAR

Term (years)

Bank	Profit %	Monthly	Term	Total
ساب (HSBC SAB) الأرخص حسب الإدخال	٥.٨٥%	‏٩٬٠٢٥ ر.س.‏	٢٠ سنة	‏٢٬٣٩٠٬٨٨٢ ر.س.‏
البنك الأهلي السعودي (SNB) أكبر بنك في المملكة	٥.٤٩%	‏٩٬٢٧٩ ر.س.‏	٢٠ سنة	‏٢٬٣٧٦٬٩٢٥ ر.س.‏
الإنماء خدمات إسلاميّة كاملة	٥.٤٩%	‏٩٬٢٧٩ ر.س.‏	٢٠ سنة	‏٢٬٣٧٦٬٩٢٥ ر.س.‏
الرياض	٥.٥٥%	‏٩٬٣٢٥ ر.س.‏	٢٠ سنة	‏٢٬٣٨٧٬٩١٥ ر.س.‏
الراجحي أوسع شبكة فروع	٥.٦٥%	‏٩٬٤٠١ ر.س.‏	٢٠ سنة	‏٢٬٤٠٦٬٢٩٣ ر.س.‏
الجزيرة	٥.٦٥%	‏٩٬٤٠١ ر.س.‏	٢٠ سنة	‏٢٬٤٠٦٬٢٩٣ ر.س.‏
البلاد	٥.٧٥%	‏٩٬٤٧٨ ر.س.‏	٢٠ سنة	‏٢٬٤٢٤٬٧٥١ ر.س.‏

الأرقام تقديريّة ومبنيّة على نسب ربح إرشاديّة. عرضك الفعلي يعتمد على الراتب، جهة العمل، التاريخ الائتماني، وعروض البنك الموسميّة. تحقّق من العرض النهائي مع البنك مباشرة.

METHODOLOGY · How Murabaha works

4 simple steps

01REQUEST
You apply for financing
You identify the target property and the bank. The bank reviews your financial profile and sets the financing cap.
02PURCHASE
The bank buys
The bank purchases the property from the seller in its own name — this is what makes the transaction Sharia-compliant (no interest-bearing loan).
03SELL
The bank sells to you
The bank sells you the property at cost plus a fixed profit margin agreed up front.
04REPAY
You pay in installments
You settle the total in equal monthly installments over the agreed term.

COMPARISON · The difference

Murabaha vs conventional interest loan

SHARIA · Murabaha ✓

· The bank actually owns the property then sells it
· The profit is fixed and never changes
· No compounded late-payment interest
· Approved by the bank Sharia boards

CONVENTIONAL · Interest-based ✗

· Direct cash loan
· Variable, compounded interest
· Riba-based late fees
· Prohibited by the majority of scholars

BANKS · Saudi banks

Where to apply

مصرف الراجحي

Al Rajhi Bank

بنك الإنماء

Alinma Bank

بنك البلاد

Bank Albilad

بنك الجزيرة

Bank AlJazira

مصرف الإنماء

Alinma Tadawul

البنك الأهلي السعودي

SNB

* All Saudi banks offer Sharia-compliant property financing products. Pricing and terms vary — compare before choosing.

DISCLAIMER · NoteFigures are estimates. Actual rates are set by the bank based on your financial profile and the target property.

Which bank is cheapest?

Indicative comparison of home-finance offers from major Saudi banks. Numbers are estimates — for your real offer use Pre-qualify calculator.

Property price

SAR

Term (years)

Bank	Profit %	Monthly	Term	Total
ساب (HSBC SAB) الأرخص حسب الإدخال	٥.٨٥%	‏٩٬٠٢٥ ر.س.‏	٢٠ سنة	‏٢٬٣٩٠٬٨٨٢ ر.س.‏
البنك الأهلي السعودي (SNB) أكبر بنك في المملكة	٥.٤٩%	‏٩٬٢٧٩ ر.س.‏	٢٠ سنة	‏٢٬٣٧٦٬٩٢٥ ر.س.‏
الإنماء خدمات إسلاميّة كاملة	٥.٤٩%	‏٩٬٢٧٩ ر.س.‏	٢٠ سنة	‏٢٬٣٧٦٬٩٢٥ ر.س.‏
الرياض	٥.٥٥%	‏٩٬٣٢٥ ر.س.‏	٢٠ سنة	‏٢٬٣٨٧٬٩١٥ ر.س.‏
الراجحي أوسع شبكة فروع	٥.٦٥%	‏٩٬٤٠١ ر.س.‏	٢٠ سنة	‏٢٬٤٠٦٬٢٩٣ ر.س.‏
الجزيرة	٥.٦٥%	‏٩٬٤٠١ ر.س.‏	٢٠ سنة	‏٢٬٤٠٦٬٢٩٣ ر.س.‏
البلاد	٥.٧٥%	‏٩٬٤٧٨ ر.س.‏	٢٠ سنة	‏٢٬٤٢٤٬٧٥١ ر.س.‏

Which bank is cheapest?

You apply for financing

The bank buys

The bank sells to you

You pay in installments

Murabaha vs conventional interest loan

Where to apply

Which bank is cheapest?

You apply for financing

The bank buys

The bank sells to you

You pay in installments

Murabaha vs conventional interest loan

Where to apply