There are many different types of property financing available to business owners and homeowners. One option that is becoming increasingly popular is Islamic property financing. This type of financing is based on the principles of Shariah law, and it has a number of advantages over traditional methods.

 In 1983, an act was passed that allowed for Islamic finance in Malaysia, with Bank Islam Malaysia coming into existence at about the same time as well. Today, more and more people are choosing to take out Islamic mortgages instead of the traditional kind.

But why is this? What are the advantages of taking Islamic property financing? In this blog post, we will discuss the benefits of taking Islamic property financing.

How Does Islamic Property Financing Work?

Before we get into the advantages of Islamic property financing, it is important to understand how it works. In traditional mortgages, the lender loans the borrower a sum of money and charges interest on that loan.

With an Islamic mortgage, the bank does not charge interest. Instead, they enter into a partnership with the borrower where they share in the profits or losses of the property. This means that if the property increases in value, the bank will make a profit. If the property decreases in value, the bank will lose money.

What Does Mean Shariah Complaint Financing?

Shariah is Islamic law, and Shariah compliant financing refers to any financial activity permissible under Shariah law. This includes things like banking, insurance, and investing. One of the main principles of Shariah law is the prohibition of riba, which is often translated as “usury” or “interest.” This means that Islamic financial institutions are not allowed to charge interest on loans.

Advantages of Taking Islamic Property Financing:

Some of the advantages of Islamic financing include:

1) Lower Interest Rates:

One of the biggest advantages of Islamic financing is that it typically has lower interest rates than traditional methods. This is because Shariah law prohibits charging interest, so lenders are not allowed to charge excessive fees.

2) Shariah Compliance:

Shariah compliance means that the financing is in line with the principles of Islam. This is important to many Muslims who want to ensure that their finances follow their religious beliefs.

3) Base Financing Rate (BFR):

The Base Financing Rate is the minimum interest rate a bank can charge for Islamic financing products. Bank Negara Malaysia sets the BFR, which currently stands at four percent.

 Furthermore, banks are only allowed to charge a maximum of six percent above the BFR. This is lower than the ceiling rate for conventional loans, which is currently at 18 percent.

4) Penalty Fee For Property Disposal:

If you want to sell your property before the end of the financing tenure, you will have to pay a penalty fee. This is because the bank will not be able to make back the money they invested in your property.

5) Cost of stamp duty lower by 20%:

The Malaysian government has implemented a number of incentives to encourage people to take out Islamic mortgages. One of these is a 20 percent reduction in the cost of stamp duty. Additionally, the government has also waived the Real Property Gains Tax for Islamic home financing.

As you can see, there are a number of advantages to taking out Islamic property financing. If you are thinking about getting a mortgage, be sure to consider this option. You may find that it is the best choice for your needs.


Islamic property financing has many advantages over other types of loans. If you are in the market for a new home or need to finance an investment property, it is worth your time to explore all of your options, including Islamic property financing. With its low-interest rates and flexible terms, an Islamic loan could be the perfect choice for you. Contact us today to learn more about how Islamic financing can work for you!

About Limra Assets

Limra Assets is a Shariah-compliant financing solutions financier that provides loans for property financing, SME businesses loans and gold investment. We offer a range of financing options to help individuals and businesses, including alternative financing for businesses that are unable to obtain funds. Our goal is to provide access to funds for investments in a Shariah-compliant manner that focuses on transparency, customer service, and competitive rates, Limra Assets can be a valuable partner in your gold investment journey.

If you’re interested in learning more about Limra Assets and our Shariah-compliant financing solutions for property purchases, gold purchases or business loans, please contact us for more information.


It is important to note that taking out a loans for any purchases and gold investment, whether through Limra Assets or any other lender, carries risks and should be approached with caution. It is important to carefully consider your financial situation and investment goals before taking out a loans, and to ensure that you fully understand the terms and conditions. Additionally, investing in gold carries its own risks and should be done with the guidance of a financial professional. This information and all external links are provided for educational purposes only and should not be considered financial advice.