What is Murabaha?
An Islamic cost-plus financing structure where the bank resells an asset to you at a transparent profit margin.
In Murabaha, the bank buys the asset and sells it to you at a disclosed markup, paid in fixed installments — no interest. It's common for home and asset finance in Islamic banking.
Example
Asset 2,500,000 + 20% margin, repaid over 15 years in fixed installments.
How Murabaha works
Murabaha is a cost-plus sale used as an Islamic alternative to an interest loan. The bank buys the asset you want and sells it to you at a price that includes a disclosed, agreed profit margin, which you repay in fixed instalments. Because the profit is fixed and transparent at the outset — not interest accruing on a balance — the structure is Sharia-compliant.
Where it's used
Murabaha is common for home, car and trade finance. Your total cost is known from day one and does not change with market rates, which some borrowers prefer for its certainty; the trade-off is less flexibility than a conventional variable-rate loan.