How it is calculated
In murabaha the bank buys the asset (a home, car…) and sells it to you at an agreed deferred price:
Sale price = cost + profit ; instalment = (sale price − down payment) ÷ monthsProfit is usually set either as an annual rate on the original amount (profit = amount × rate × years) or via a declining schedule like a mortgage, but fixed once the contract is signed.
The calculator shows the effective annual rate so you can compare offers.
Worked example
An 800,000 home with 10% down and a 3.5% annual profit on the original amount for 20 years: financed 720,000, profit = 720,000 × 3.5% × 20 = 504,000, instalment = 1,224,000 ÷ 240 = 5,100.
Frequently asked questions
How is murabaha different from a loan?
The bank owns the asset and sells it at a fixed price that cannot grow with delay; a loan is cash lent with interest.
Does the price change if I pay late?
The price cannot increase after the contract; late fees, if any, go to charity under Shariah board rules.
Can I settle early?
Yes, and many banks rebate part of the remaining profit on early settlement.