Islamic Home Loan and the advantages

Home ownership credit is a most prominent way to own a house nowadays, Conventional and Sharia bank offered so many mortgage product to home loan.

Related to that, home loan also have a dilemma where conventional bank, offering an interest rate which related to “riba” in Moeslem perspective.

In that way, Islamic Bank offering an Islamic home loan or KPR Sharia, unlike conventional bank which called it as credit, Islamic bank called the product as “financing” with a certain agreement.

The agreements :

Murabahah agreement is a sale and purchase agreement between the bank and the customer, where the bank buy the house needed by the customer and then sell it to the customer for the purchase price plus the profit margin agreed by the bank and the customer. There were also those who added a wakalah agreement in this sharia mortgage.

In addition to the murabahah agreement there is also an agreement with another sale and purchase scheme, namely the istishna agreement. The istishna agreement is the ordering of goods (houses) with certain agreed criteria and requirements as well as payments with certain agreed values.

Beside the two, there are also mudharabah agreement and musyarakah mutanaqisah.

Here are the difference :