What is an Islamic mortgage in the UK?
Links marked * are commercial or go to our partner sites, which share our operator. Third-party companies may pay us commission. How we make money.
In short: Not a conventional interest loan — a home purchase plan where you pay rent plus payments that gradually acquire ownership share of the property. FCA-regulated UK providers include several banks and specialist firms.
Content updated:
Common structures include ijara (lease) and diminishing musharaka (co-ownership). You pay monthly amounts that combine rent on the bank's share and capital acquisition — no interest is charged.
Total cost can differ from standard mortgages; compare the full price including fees. Deposit and affordability rules are similar to conventional lending.
See our Sharia-compliant savings guide for broader Islamic finance context.
Primary source: gov.uk/buying-a-home
Part of our Mortgages & first homes
This quick answer sits inside our wider mortgages & first homes hub — with sub-guides, calculators and step-by-step explainers on the same topic.
Read the full mortgages & first homes guide →