Homebuyers in Dubai can choose between conventional interest-bearing mortgages and Islamic Sharia-compliant home financing structures offered by institutions like Dubai Islamic Bank (DIB), Abu Dhabi Islamic Bank (ADIB), and Emirates Islamic. Both structures are available to Muslim and non-Muslim buyers alike.
How Islamic Home Finance Structures Work
The bank purchases the property and leases it back to you. Your monthly payment comprises rent plus a gradual equity share purchase until 100% ownership transfers.
The bank buys the property and sells it to you at an agreed marked-up profit price, divided into fixed monthly installments over the loan term.
Profit Rates vs. Conventional Interest Rates
Conventional banks charge interest benchmarked against EIBOR (Emirates Interbank Offered Rate). Islamic banks charge a profit rate that tracks EIBOR closely, ensuring competitive monthly pricing while keeping contracts free from Riba (usury).
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