Saudi Arabia Home Finance Calculator — Murabaha & Ijara
Estimate your monthly Islamic home finance installment in SAR. Shariah-compliant Murabaha and Ijara, current bank profit rates, and REDF/Sakani guidance. No signup.
Current Saudi home finance rates (April 2026)
| Structure | Effective rate (p.a.) | Notes |
|---|---|---|
| Murabaha (fixed margin) | 6.0% – 7.0% | Fixed installment, known upfront |
| Ijara (lease-to-own) | 6.0% – 7.0% | Ownership transfers over term |
| REDF/Sakani supported | Subsidized | For eligible Saudi citizens |
SAR is pegged to the US dollar, so rates track the US Fed and SAMA policy (≈4.5%). All mainstream Saudi home finance is Shariah-compliant — no interest, a transparent profit margin instead.
Major Saudi home finance providers
- Al Rajhi Bank — the largest Islamic bank, wide home finance range
- Saudi National Bank (SNB) — competitive real-estate finance
- Alinma Bank — fully Shariah-compliant, popular for property
- Bank Albilad — Islamic financing with flexible terms
- Riyad Bank / SAB — additional home finance options
The real cost of a SAR 1M home finance
Example: SAR 1,000,000 at 6.5% effective for 25 years.
- Monthly installment: ≈ SAR 6,752
- Total paid over 25 years: ≈ SAR 2.03 million
- Total profit (bank's margin): ≈ SAR 1.03 million
- A larger down payment or REDF support meaningfully lowers both.
Saudi home finance rates in 2026: how bank profit margins track SAMA's repo rate
Home finance in Saudi Arabia is structured as Sharia-compliant Murabaha or Ijarah financing rather than conventional interest, but the pricing mechanics work the same way for budgeting purposes: a bank sets a profit rate on top of its cost of funds, and that cost of funds is anchored to the Saudi Central Bank's (SAMA) benchmark repo rate. On 29 October 2025, SAMA cut its repo rate by 25 basis points to 4.50% (and the reverse repo rate to 4.00%), continuing to track the US Federal Reserve given the riyal's dollar peg; that 4.50% repo rate remained the prevailing benchmark through September 2026. Against that backdrop, Al Rajhi Bank — Saudi Arabia's largest Islamic bank by mortgage volume — has been advertising real estate finance with a profit margin as low as 4.5% (flat, for the life of the finance) on terms up to 20 years, often through subsidized campaigns run jointly with the Real Estate Development Fund (REDF). Other large lenders such as Saudi National Bank (SNB) price real estate Murabaha in a broadly similar 4%–6% band depending on tenor, loan-to-value, and whether a REDF subsidy applies.
Worked example: SAR 1,000,000 home finance at 4.5% over 20 years
Using the standard amortizing-loan formula M = P·r·(1+r)n / ((1+r)n − 1), where P is the principal, r is the monthly profit rate, and n is the number of monthly installments:
- P = SAR 1,000,000
- Annual profit rate = 4.5%, so monthly rate r = 0.045 / 12 = 0.00375
- Term = 20 years, so n = 240 months
Step by step: (1+r)n = 1.00375240 ≈ 2.4534. Then M = 1,000,000 × 0.00375 × 2.4534 / (2.4534 − 1) = 1,000,000 × 0.0092003 / 1.4534 ≈ SAR 6,326.49 per month. Over 240 months, total payments ≈ SAR 1,518,358.50, meaning total profit paid over the life of the finance ≈ SAR 518,358.50 — roughly 52% of the original principal, illustrating why shortening the tenor or negotiating even a 0.5-point lower margin materially reduces the total cost of home finance in Saudi Arabia.
Frequently Asked Questions
How does Islamic home finance work?
Murabaha: the bank buys and resells the home at a fixed margin. Ijara: the bank leases it to you with ownership transferring over time. No interest (riba) — a fixed, known installment.
What is the current profit rate?
About 6%–7% p.a. effective (April 2026). SAR is USD-pegged, so rates follow the US Fed and SAMA (≈4.5%).
What is REDF / Sakani?
A government program that subsidizes financing for eligible Saudi citizens. Check Sakani for your eligibility; this tool estimates the standard installment before subsidy.
How much down payment?
Up to 90% financing (10% down) for first homes under SAMA rules; more down means a lower installment.
What is SAMA's current repo rate and why does it matter for home finance?
SAMA cut its repo rate by 25 basis points to 4.50% on 29 October 2025, and that level was still the prevailing benchmark through September 2026. Saudi banks price Murabaha and Ijarah home finance profit rates off this benchmark, so it acts as the floor for what any lender can realistically offer.
What rate is Al Rajhi Bank currently advertising for home finance?
As of 2026, Al Rajhi Bank has promoted real estate finance with a profit margin as low as 4.5% (fixed for the full term) on financing terms up to 20 years, frequently tied to Real Estate Development Fund (REDF) support programs; your actual offer depends on income, property type, and REDF eligibility.
Is Saudi home finance the same as an interest-bearing mortgage?
No. Saudi home finance is structured as Sharia-compliant Murabaha (cost-plus-profit sale) or Ijarah (lease-to-own), avoiding interest (riba) in structure, but the effective monthly cost behaves like an amortizing loan and can be estimated with the same M = P·r·(1+r)n/((1+r)n−1) formula used for conventional mortgages.
What is SAMA's current repo rate and why does it matter for home finance?
SAMA cut its repo rate by 25 basis points to 4.50% on 29 October 2025, and that level was still the prevailing benchmark through September 2026. Saudi banks price Murabaha and Ijarah home finance profit rates off this benchmark, so it acts as the floor for what any lender can realistically offer.
What rate is Al Rajhi Bank currently advertising for home finance?
As of 2026, Al Rajhi Bank has promoted real estate finance with a profit margin as low as 4.5% (fixed for the full term) on financing terms up to 20 years, frequently tied to Real Estate Development Fund (REDF) support programs; your actual offer depends on income, property type, and REDF eligibility.
Is Saudi home finance the same as an interest-bearing mortgage?
No. Saudi home finance is structured as Sharia-compliant Murabaha (cost-plus-profit sale) or Ijarah (lease-to-own), avoiding interest (riba) in structure, but the effective monthly cost behaves like an amortizing loan and can be estimated with the same M = P·r·(1+r)n/((1+r)n−1) formula used for conventional mortgages.