Islamic Super  /  Investments                                                                                                                                                                                                                                                                                                                               1300 043 529

Trade (Ijarah Model) vs Riba

Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah . But whoever returns to [dealing in interest or usury] – those are the companions of the Fire; they will abide eternally therein.

Based on this verse, Islam permits trade and forbids interest, even though the apparent financial outcomes of each may seem to be similar. Hence, Hejaz Finance adopt a trade based approach to financing property purchase rather than an interest based approach.

The Hejaz Finance Difference

Our product is structured using the Islamic Finance model known as Ijarah (Shared Equity Rental). Using this structure enables us to allow the title to the property to be held in the client’s name with the client making fixed monthly repayments. Each repayment comprises two components, a periodic charge for residing in our share of the property and a principal payment to acquire our share of equity in the property. As you acquire more equity in the property, the rental component decreases, and the equity component increases until the property is purchased outright or you sell/refinance.

Hejaz Islamic Finance

The home buyer and Hejaz Finance agree to be co-owners in the property.

The two parties buy the home and the ownership of the property is determined by each party’s down payment.

The home buyer makes monthly payments to Hejaz Finance. Part of the payment is a periodic charge for full use of the home and the rest is a payment to increase the buyer’s ownership of the property.

Over the course of the arrangement, the home buyer purchases all of Hejaz Finance’s ownership stake and becomes the sole owner of the property.

Conventional Mortgages

The home buyer arranges a loan from a bank or mortgage company according to a fixed or variable interest rate.

The home buyer purchases the home.


The home buyer makes monthly payments to repay principal and interest on the loan.


Over the course of the loan, the home buyer repays the debt in full.

Unique Benefits

Hejaz Finance offers unique benefits that distinguish it from other home financing providers. These benefits provide a transparent, consumer friendly home financing and are consistent with the Islamic faith’s strict prohibition on riba (interest).

Due to uncertainty with Variable Rates, we only offer fixed repayments, giving you clarity and certainty so you can plan accordingly, peacefully.

With our home finance product, the title to your property is in your name from day one. That’s fair and safe. Other providers own the home, so you need to pay double stamp duty.

With Hejaz Financial Services, we can source funds from investment pools which are available to us. Rest assured, no banks are involved.

Other providers make money from money (interest), we trade equity in the house in exchange for money which is permissible in Islam.

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