Islamic home financing
How Murabaha home financing works
Murabaha is a cost-plus sale. Barakah buys the home you choose and sells it to you at a fixed total price, purchase cost plus a disclosed profit, that you repay in monthly installments.
Reviewed by Resident Advisory Board · Updated 2026-10-25
From application to closing
The steps
- 1
Apply and choose your advisor
Start one short application and pick a Barakah advisor licensed in your state.
- 2
Choose your home
Find the home and sign the purchase contract; your advisor confirms the numbers.
- 3
Barakah buys the home first
Barakah purchases the property, so it owns the home before selling it to you.
- 4
You buy it at a fixed price
Barakah sells you the home for its purchase cost plus a disclosed profit. The total sale price is set once, at signing.
- 5
Title at closing, fixed installments
The home is in your name at closing, and you pay the fixed price in monthly installments. The price does not compound.
A worked example
[Illustrative example, compliance to approve]
| Purchase cost | $200,000 |
|---|---|
| Disclosed profit | $20,000 |
| Total sale price | $220,000 |
| Term | 30 years |
| Fixed installments | 360 |
| Monthly installment | $611.11 |
The total sale price is fixed at signing. About $611 per month, before taxes and insurance.
Murabaha vs. a conventional mortgage
| Conventional mortgage | Barakah Murabaha |
|---|---|
| What you agree toborrowing money | What you agree tobuying a home from Barakah at a fixed price |
| How the cost is seta charge on the balance over time | How the cost is seta profit disclosed once, at signing |
| Can the price grow?it can | Can the price grow?no, it's fixed |
| Titleat closing | Titleat closing |
| Reviewed by Islamic scholarsno | Reviewed by Islamic scholarsyes, Resident Advisory Board |
Educational comparison, not advice. Terms depend on your application.
Is a Murabaha price the same as a mortgage charge?
No. Barakah owns the home first and sells it to you. The profit is part of one agreed sale price; it does not grow over time.
Read the signed fatwasIllustrative figures
Murabaha calculator
Your illustrative estimate
[Minimum down payment TBD]
Estimated monthly installment
$611.11
Before taxes, insurance and fees
- Amount financed
- $200,000.00
- Disclosed profit
- $20,000.00
- Total sale price
- $220,000.00
- Installments
- 360
- Down payment
- 0.00%
Illustrative estimate only. Not an offer of financing, a quote or a commitment. Actual terms depend on an application, underwriting and Barakah's disclosures. Excludes taxes, insurance and fees.