Halal Mortgage Calculator
Estimate the monthly payment and total cost of Sharia-compliant home financing in Canada. Compare Canadian providers side by side, and see how a halal profit rate (the provider's yearly return, used in place of interest) compares with a conventional interest-based mortgage.
Each year's payments: profit vs buying your share
How each year's payments divide between profit or rent to the provider and buying your share of the home, and the year your share passes half.
The three structures in plain words
The payment can look like a loan payment, but the contract is different: the provider earns profit on a sale or rent on property, not interest on money.
| Structure | Who owns the home | What each payment buys |
|---|---|---|
| Murabaha cost-plus sale | You. The provider buys the home, then sells it to you at a higher, agreed price. | A part of that fixed price. The markup is set at the start and does not change. |
| Diminishing Musharaka shrinking partnership | You and the provider together. Your share grows with each payment. | Rent on the provider's share, plus a piece of that share. The rent part gets smaller as your share grows. |
| Ijara lease to own | The provider (sometimes through a trust), until the end of the lease. | Rent for living in the home. Ownership passes to you at the end. |
Halal home-financing providers in Canada
Advertiser disclosure: some links on this page may earn this site a referral commission, at no cost to you. Rankings and math never depend on commissions, see how this site makes money.
The second segment of each bar is a provider's estimated monthly range, from its lowest published rate to its highest; overlapping ranges mean no provider is reliably cheapest. Providers that publish no rates are not charted.
| Provider | Model | Profit rate | Est. monthly range |
|---|
Ranked by estimated monthly cost at your inputs, lowest first (down-payment-eligible providers first). Rankings never depend on referral commissions. Each estimate is a low-high range across the provider's published rate band, with the date of those rates; providers that publish no rates show "on request" and follow the priced ones; a provider whose amortization cap is below your term is priced at its cap, and a provider whose minimum down payment you have not met is greyed out.
How this is calculated
In 30 seconds
- Halal home financing avoids riba: interest, or any fixed charge for lending money.
- Instead, the provider takes part in the home. It earns profit on a sale or rent on the share it owns.
- The tool turns the profit rate you enter into a monthly payment, and shows the total you pay over the amortization.
- It shows a conventional, interest-based mortgage next to it, for contrast only.
- It lists Canadian providers. Only some publish rates. Ask the others for a quote.
The payment
The amount financed is home price − down payment. The monthly payment is the standard amortizing formula P × r ÷ (1 − (1+r)^−n) where r is the monthly profit rate (annual rate ÷ 12) and n is the number of months. Halal financing is generally profit- or rent-based and compounds monthly, so we compound monthly, not semi-annually. Total cost is the monthly payment times the number of months; total profit paid is total cost minus the amount financed.
Why this is not riba (interest)
In a conventional mortgage the bank lends money and charges interest on that loan, which is riba. Halal structures avoid this by having the institution take part in the home itself:
Murabaha (cost-plus sale). The institution buys the home and resells it to you at an agreed, disclosed markup payable in fixed instalments. The markup is fixed up front and never changes. Its return is profit on a genuine sale of an asset, not interest on a loan.
Diminishing Musharaka (declining partnership). You and the institution co-own the home. You pay rent on the share you do not yet own and, separately, buy out the institution's share over time. As your ownership grows, the rent portion shrinks. Its return is rent on property it owns.
Ijara (lease-to-own). The institution owns the home and leases it to you; your payments are rent, and ownership transfers to you at the end of the term.
Profit vs buying your share, year by year
Each month, the profit or rent part of your payment is the amount still outstanding (the provider's share of the home, or the unpaid cost price) times the monthly profit rate (annual rate ÷ 12); the rest of the payment buys your share and reduces what is outstanding. The chart adds those monthly parts up by year, so each year's two layers add up to that year's payments, the profit layers add up to the total profit paid, and the buy-out layers add up to the amount financed. Your share is your down payment plus everything bought out so far, divided by the price. It uses the purchase price and ignores any rise or fall in the home's value. In a Diminishing Musharaka it is your ownership share; in Murabaha and Ijara it is the same economic stake. This is an estimate at one fixed profit rate for the whole amortization: real contracts can reset the rate at renewal, and a provider's own schedule may split each payment differently.
Provider payment ranges
For each provider whose minimum down payment you meet, the payment is worked out with the same monthly formula at the low end and the high end of its published profit-rate band, priced at its amortization cap when your term is longer. A provider that publishes no rates is listed as "on request" and is never priced, ranked on price or charted: a guessed rate would be an invented quote. The bar shows the payment at the low end, then the extra up to the high end, so the second segment is the provider's range. Ranges that overlap mean no provider is reliably cheapest. The dashed line marks your own payment at the profit rate you entered. Order never depends on referral commissions.
Halal vs conventional
For contrast the tool also shows a conventional, interest-based mortgage at a reference 5-year fixed uninsured rate of 4.44% (as of July 2026), calculated the Canadian way with semi-annual compounding. That conventional figure is not halal; it is shown only so you can see the gap. Halal financing often costs somewhat more because the market is smaller and most products are uninsured.
Down payment
Most Canadian halal products are uninsured, so a down payment of 20% or more is the norm. There is no CMHC-style low-down-payment insurance for them, though some co-ownership structures may allow less. This tool does not add any insurance premium.
What this does not model
Actual provider underwriting, fees, closing costs, rate resets, early-payout terms, property taxes, or the precise legal mechanics of each contract. Estimates use each provider's published rate range, which may be months old (each row shows its date), not a quote. This is an educational estimate, not a fatwa (a religious ruling) and not financial advice.
FAQ
Is a halal mortgage really interest-free? No interest is charged on a loan of money. The institution instead earns a disclosed profit (Murabaha), rent on a co-owned share (Diminishing Musharaka), or lease payments (Ijara). The math can look similar to a loan, but the structure and the contract differ.
Why do halal mortgages cost more? A smaller market, less competition, mostly uninsured products, and extra structuring work mean the effective profit rate is often a little above the best conventional rate.
What down payment is needed? Usually 20% or more, because most Canadian halal products are uninsured. Some partnership structures may allow less.
Which providers offer halal mortgages in Canada? Manzil, Eqraz, Ijara Community Development Corp, Servus Credit Union (Alberta), Canadian Halal Financial Corporation (Edmonton) and Assiniboine Credit Union (Manitoba). Only Manzil and Eqraz publish rates. Availability and pricing vary by province and applicant.
Do scholars agree these are halal? Scholars differ on specific contracts and providers. This tool is educational and takes no position; consult a qualified scholar and a licensed mortgage professional before committing.