How Islamic
finance works
Learn the difference between Islamic and Convential
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.
Surah Al-Baqarah [2:275]
The basis for all Islamic finance lies in the principles of the Sharia, or Islamic Law, which is taken from the Qur'an and from the example of Prophet Muhammad (peace be upon him). The Islamic form of finance is as old as the religion of Islam itself.
From the above verse, scholars have interpreted it as riba and trade has the same outcome, but one is allowed and the other is not. Though the outcome with Islamic finance and conventional loans are the same, the way we get to the end goal is very different. Just like halal chicken and nonhalal chicken, at the end of the day, it is still a chicken.
Below represents how the Islamic finance model is very different but aims to achieve the same outcome, get you in your home in an affordable and legal manner.
Conventional Mortgages

The home buyer arranges a loan from a bank or mortgage company according to a fixed or variable interest rate, based on the RBA interest rates.

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.
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.
Mufti Desai explains
4 Pillars of Sharia Compliance
Being a wealth management and advisory firm, we can source funds from investment pools available to us.
With our home finance product, the title to your property is in your name from day one. That’s fair and safe.
Contracts approved by world-leading scholars and local regulatory bodies. Giving you the best of both worlds.
The Islamic financial services sector is the most audited and regulated Halal industry, even more so than Halal food, hence, we have taken our Sharia Compliance to new heights by teaming up with a Global Islamic Finance auditing and advisory firm, Global Islamic Financial Services Firm (GIFS).
Helping build tomorrows community
We have successfully funded the establishment of numerous mosques in Australia. We are committed to providing tangible benefits to our community with your help.

Join the thousands of Muslim Australians who have made the change to an Islamic home.
Further information
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