Sharia mortgages (KPR syariah) are a popular choice for many families who want to buy a home with financing that follows Islamic principles. Besides religious reasons, some people are also drawn to the fact that instalments can stay the same for the entire tenor.
However, there is more than one type of sharia mortgage. The contract (akad) used determines how instalments are calculated, whether they can change, and what happens if you want to repay early. This article explains how sharia mortgages work, the types of contracts, how they differ from conventional mortgages, and what to check before applying.
A sharia mortgage is home financing from an Islamic bank or the sharia business unit of a conventional bank, run under contracts that follow Islamic principles. Instead of interest, the bank's return comes from a sale margin, profit sharing, or ujrah (rental fee), depending on the contract.
The contracts follow fatwas issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI).
1. Murabahah (sale)
The bank buys the home and sells it to the customer at its cost plus an agreed profit margin set at the start. The customer pays in instalments. Because the sale price is fixed from the start, instalments are generally the same for the entire tenor. This contract is based on DSN-MUI Fatwa Number 04/DSN-MUI/IV/2000.
2. Musyarakah Mutanaqisah or MMQ (diminishing partnership)
The bank and the customer buy the home together with set ownership shares. The customer then gradually buys the bank's share while paying ujrah on the portion the bank still owns, until the home is fully owned by the customer. The ujrah may be reviewed periodically as agreed, so instalments can change. This contract is based on DSN-MUI Fatwa Number 73/DSN-MUI/XI/2008.
3. Ijarah Muntahiyah Bittamlik or IMBT (lease ending in ownership)
The customer leases the home from the bank, and ownership is transferred to the customer at the end of the lease. This contract is based on DSN-MUI Fatwa Number 27/DSN-MUI/III/2002.
4. Istishna (build to order)
Used for homes that are yet to be built or are under construction. Specifications and price are agreed at the start. This contract is based on DSN-MUI Fatwa Number 06/DSN-MUI/IV/2000.
In practice, murabahah and MMQ are the contracts most often offered for sharia mortgages.
The bank's return. Conventional mortgages use interest. Sharia mortgages use a margin, profit sharing, or ujrah depending on the contract.
Instalment certainty. Conventional mortgages usually start with a fixed rate and then switch to floating, so instalments can rise. Sharia mortgages under murabahah generally have fixed instalments for the whole tenor. Under MMQ, instalments can change when the ujrah is reviewed. Conventional interest is explained in Mortgage Interest: Fixed, Floating, and Tiered.
Late payment penalties. At Islamic banks, penalties for customers who can pay but delay are a form of ta'zir, and the money goes to social funds rather than bank income. This follows DSN-MUI Fatwa Number 17/DSN-MUI/IX/2000. Customers unable to pay due to force majeure may not be penalised.
Early repayment. Under murabahah, the sale price is agreed at the start. An Islamic bank may give an early settlement discount if the customer repays early, but the amount is at the bank's discretion and is not promised in the contract, in line with DSN-MUI Fatwa Number 23/DSN-MUI/III/2002.
Advantages:
Follows Islamic principles for those who want it.
Under murabahah, instalments are fixed, making them easier to plan and unaffected by changes in market interest rates.
The contract and costs are clearly agreed at the start.
Points to consider:
A murabahah margin can look higher than a conventional mortgage's promotional rate in the early years, because the margin applies for the whole tenor. Compare the total amount paid over the tenor, not just the first month's instalment.
Under MMQ, make sure you understand when and how the ujrah is reviewed.
Product choices, tenors, and early settlement terms differ from bank to bank.
Requirements are generally similar to conventional mortgages, although details differ by bank:
Identity documents, such as your ID card, family card, tax number, and marriage certificate if married.
Income documents, such as payslips and an employment letter for employees, or financial statements and business licences for the self-employed.
Bank statements for the last few months.
Property documents, such as a copy of the certificate and the PBG or IMB, or documents from the developer for a new home.
A good credit history. Islamic banks also check your financing history through SLIK OJK. How to check it is explained in How to Check SLIK OJK.
1. Ask which contract is used. Murabahah and MMQ work differently, especially in whether instalments can change.
2. Ask for a total payment simulation. Compare several Islamic banks, and compare against conventional mortgages with the same tenor.
3. Read the RIPLAY and the draft contract. Check the margin or ujrah, administration fees, insurance, penalty terms, and the early repayment policy.
4. Calculate what you can afford. Simulate it with the 2026 Mortgage Calculator so instalments stay comfortable for your family's finances.
5. Prepare for costs beyond instalments. There is the down payment, taxes, and contract fees. These are covered in The Cost of Buying a House in 2026, and you can estimate BPHTB with the BPHTB Calculator.
If you plan to buy a home in a Damai Putra Group area, such as Kota Harapan Indah, Tera Damai, or Segara City, ask the marketing team about the sharia financing options available through partner banks, including the contract used and the instalment simulation. The full steps for applying for a mortgage are in the 2026 Mortgage Guide.
What is the difference between sharia and conventional mortgages?
Conventional mortgages use interest, while sharia mortgages use a margin, profit sharing, or ujrah depending on the contract. Under murabahah, instalments are generally fixed for the whole tenor.
Are sharia mortgage instalments always fixed?
Not always. Under murabahah they are generally fixed, but under MMQ they can change when the ujrah is reviewed as agreed.
Do sharia mortgages have late payment penalties?
Yes, in the form of ta'zir for customers who can pay but deliberately delay. The money goes to social funds, not bank income.
Is a sharia mortgage more expensive?
It depends on the bank, the contract, and the tenor. Compare the total amount paid over the tenor, not just the first instalment.
Can a sharia mortgage be repaid early?
Yes. Under murabahah, the bank may give an early settlement discount, but the amount is at the bank's discretion. Ask about the terms before signing.
This article is general information and not financial advice. Sharia mortgage products, contracts, and terms differ between banks, so please confirm the details directly with the bank.
For more information about Damai Putra Group homes and financing options, contact the Damai Putra Group Marketing Gallery via WhatsApp Official 0811 4466 888 or visit www.damaiputra.com.
However, there is more than one type of sharia mortgage. The contract (akad) used determines how instalments are calculated, whether they can change, and what happens if you want to repay early. This article explains how sharia mortgages work, the types of contracts, how they differ from conventional mortgages, and what to check before applying.
What Is a Sharia Mortgage?
A sharia mortgage is home financing from an Islamic bank or the sharia business unit of a conventional bank, run under contracts that follow Islamic principles. Instead of interest, the bank's return comes from a sale margin, profit sharing, or ujrah (rental fee), depending on the contract.
The contracts follow fatwas issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI).
Types of Sharia Mortgage Contracts
1. Murabahah (sale)
The bank buys the home and sells it to the customer at its cost plus an agreed profit margin set at the start. The customer pays in instalments. Because the sale price is fixed from the start, instalments are generally the same for the entire tenor. This contract is based on DSN-MUI Fatwa Number 04/DSN-MUI/IV/2000.
2. Musyarakah Mutanaqisah or MMQ (diminishing partnership)
The bank and the customer buy the home together with set ownership shares. The customer then gradually buys the bank's share while paying ujrah on the portion the bank still owns, until the home is fully owned by the customer. The ujrah may be reviewed periodically as agreed, so instalments can change. This contract is based on DSN-MUI Fatwa Number 73/DSN-MUI/XI/2008.
3. Ijarah Muntahiyah Bittamlik or IMBT (lease ending in ownership)
The customer leases the home from the bank, and ownership is transferred to the customer at the end of the lease. This contract is based on DSN-MUI Fatwa Number 27/DSN-MUI/III/2002.
4. Istishna (build to order)
Used for homes that are yet to be built or are under construction. Specifications and price are agreed at the start. This contract is based on DSN-MUI Fatwa Number 06/DSN-MUI/IV/2000.
In practice, murabahah and MMQ are the contracts most often offered for sharia mortgages.
Sharia vs Conventional Mortgages
The bank's return. Conventional mortgages use interest. Sharia mortgages use a margin, profit sharing, or ujrah depending on the contract.
Instalment certainty. Conventional mortgages usually start with a fixed rate and then switch to floating, so instalments can rise. Sharia mortgages under murabahah generally have fixed instalments for the whole tenor. Under MMQ, instalments can change when the ujrah is reviewed. Conventional interest is explained in Mortgage Interest: Fixed, Floating, and Tiered.
Late payment penalties. At Islamic banks, penalties for customers who can pay but delay are a form of ta'zir, and the money goes to social funds rather than bank income. This follows DSN-MUI Fatwa Number 17/DSN-MUI/IX/2000. Customers unable to pay due to force majeure may not be penalised.
Early repayment. Under murabahah, the sale price is agreed at the start. An Islamic bank may give an early settlement discount if the customer repays early, but the amount is at the bank's discretion and is not promised in the contract, in line with DSN-MUI Fatwa Number 23/DSN-MUI/III/2002.
Advantages and Points to Consider
Advantages:
Follows Islamic principles for those who want it.
Under murabahah, instalments are fixed, making them easier to plan and unaffected by changes in market interest rates.
The contract and costs are clearly agreed at the start.
Points to consider:
A murabahah margin can look higher than a conventional mortgage's promotional rate in the early years, because the margin applies for the whole tenor. Compare the total amount paid over the tenor, not just the first month's instalment.
Under MMQ, make sure you understand when and how the ujrah is reviewed.
Product choices, tenors, and early settlement terms differ from bank to bank.
General Requirements for a Sharia Mortgage
Requirements are generally similar to conventional mortgages, although details differ by bank:
Identity documents, such as your ID card, family card, tax number, and marriage certificate if married.
Income documents, such as payslips and an employment letter for employees, or financial statements and business licences for the self-employed.
Bank statements for the last few months.
Property documents, such as a copy of the certificate and the PBG or IMB, or documents from the developer for a new home.
A good credit history. Islamic banks also check your financing history through SLIK OJK. How to check it is explained in How to Check SLIK OJK.
Tips Before Choosing a Sharia Mortgage
1. Ask which contract is used. Murabahah and MMQ work differently, especially in whether instalments can change.
2. Ask for a total payment simulation. Compare several Islamic banks, and compare against conventional mortgages with the same tenor.
3. Read the RIPLAY and the draft contract. Check the margin or ujrah, administration fees, insurance, penalty terms, and the early repayment policy.
4. Calculate what you can afford. Simulate it with the 2026 Mortgage Calculator so instalments stay comfortable for your family's finances.
5. Prepare for costs beyond instalments. There is the down payment, taxes, and contract fees. These are covered in The Cost of Buying a House in 2026, and you can estimate BPHTB with the BPHTB Calculator.
Buying a Damai Putra Group Home with a Sharia Mortgage
If you plan to buy a home in a Damai Putra Group area, such as Kota Harapan Indah, Tera Damai, or Segara City, ask the marketing team about the sharia financing options available through partner banks, including the contract used and the instalment simulation. The full steps for applying for a mortgage are in the 2026 Mortgage Guide.
Frequently Asked Questions
What is the difference between sharia and conventional mortgages?
Conventional mortgages use interest, while sharia mortgages use a margin, profit sharing, or ujrah depending on the contract. Under murabahah, instalments are generally fixed for the whole tenor.
Are sharia mortgage instalments always fixed?
Not always. Under murabahah they are generally fixed, but under MMQ they can change when the ujrah is reviewed as agreed.
Do sharia mortgages have late payment penalties?
Yes, in the form of ta'zir for customers who can pay but deliberately delay. The money goes to social funds, not bank income.
Is a sharia mortgage more expensive?
It depends on the bank, the contract, and the tenor. Compare the total amount paid over the tenor, not just the first instalment.
Can a sharia mortgage be repaid early?
Yes. Under murabahah, the bank may give an early settlement discount, but the amount is at the bank's discretion. Ask about the terms before signing.
This article is general information and not financial advice. Sharia mortgage products, contracts, and terms differ between banks, so please confirm the details directly with the bank.
For more information about Damai Putra Group homes and financing options, contact the Damai Putra Group Marketing Gallery via WhatsApp Official 0811 4466 888 or visit www.damaiputra.com.
