Islamic Home Finance in the UAE

Sharia-compliant property finance from UAE Islamic banks — compared against conventional rates, commission-free.

Islamic home finance funds the same purchase as a conventional mortgage but is structured to avoid charging interest. Instead of lending you money and charging riba, the bank takes ownership of the property and either leases it to you until ownership transfers (Ijara) or sells it to you at an agreed mark-up (Murabaha). You still make a monthly payment over a set term, and the bank still assesses your income, debt burden and deposit the same way.

The question we are asked most is whether it costs more. At the top of the market it has not: when we last verified, the cheapest Islamic and the cheapest conventional rate on our panel were the same. Further down the panel the gap runs both ways, which is why it is worth comparing bank by bank rather than assuming.

Islamic vs conventional · verified August 2026

3.75% vs 3.75%

Sharjah Islamic Bank against Standard Chartered, the cheapest on each side of our panel when we last verified. The meaningful gap is between banks, not between Islamic and conventional.

Islamic rates across the banks we compare

Advertised salary-transfer rates. Your rate depends on your profile, the property and whether you transfer salary.

Sharjah Islamic Bank — from 3.75%
Dubai Islamic Bank — from 3.95%
Abu Dhabi Islamic Bank — from 3.99%
Emirates Islamic — from 3.99%
Ajman Bank — from 4.09%

Self-employed pricing differs and is usually higher. See each bank's page for its self-employed rate, or why your rate may differ from the advertised one →

Ijara, Murabaha or Musharakah: which will you be offered?

Most UAE home finance is written as Ijara, a lease-to-own structure: the bank buys the property and leases it to you, with each payment part rent and part purchase, until ownership transfers at the end of the term. Some banks instead use Diminishing Musharakah, a declining partnership in which you and the bank co-own the property and your payments progressively buy out the bank's share. Murabaha works differently again: the bank buys the property and immediately resells it to you at a disclosed mark-up, fixed for the life of the deal. More on how Ijara works →

What is genuinely different, and what is not

Not different: deposit rules, LTV caps, DBR limits, age limits and the documents you provide. The UAE Central Bank rules apply to both.
Not different: on a reducing-balance Ijara, a profit rate of 3.75% and an interest rate of 3.75% produce the same instalment. A Murabaha mark-up is quoted differently and needs comparing on total cost rather than headline rate. Flat vs reducing rates →
Not different: early settlement is capped identically, at 1% of the outstanding balance or AED 10,000, whichever is lower.
Different: Islamic banks often deliver that as a rebate on unearned profit rather than as a fee.
Different: the bank takes an ownership interest in the property during the term, which changes the paperwork rather than your rights of occupation.
Different: Takaful replaces conventional life and property insurance.

Why arrange it through Mortgease?

We compare Islamic and conventional offers side by side, so the choice is made on total cost rather than assumption.
Commission-free to you — we are paid on completion, never by you.
One advisor handles the file end to end, across the banks we cover.

Frequently asked questions

Is an Islamic mortgage more expensive than a conventional one in the UAE?

Not at the top of the market. On the rates we last verified, the cheapest advertised salary-transfer rate from an Islamic bank on our panel is 3.75%, and the cheapest conventional rate is also 3.75%. Islamic finance is priced as a profit rate rather than interest, but on a reducing-balance Ijara the monthly payment on a like-for-like deal is the same. The gap that matters is between banks, not between Islamic and conventional.

Can non-Muslims take an Islamic mortgage in the UAE?

Yes. Islamic home finance in the UAE is open to anyone who meets the bank's criteria, regardless of faith. Several of our clients choose it purely on price and terms.

What is the difference between Ijara and Murabaha?

Both avoid charging interest, but they get there differently. Under Ijara the bank buys the property and leases it to you, with ownership transferring at the end of the term. Under Murabaha the bank buys the property and sells it to you at an agreed mark-up, paid in instalments. A third structure, Diminishing Musharakah, has you and the bank co-own the property while your payments buy out the bank's share. Ijara is the most common for UAE home finance.

Which UAE banks offer Islamic home finance?

Dedicated Islamic banks including Dubai Islamic Bank, Abu Dhabi Islamic Bank, Emirates Islamic, Sharjah Islamic Bank and Ajman Bank, plus Islamic windows at several conventional banks. We compare the Islamic and conventional lenders on our panel side by side so you see the real cost of each.

Islamic vs conventional, compared → · Mortgage calculator → · All banks →