1. What is Dubai Islamic Home Loan?

The Dubai Islamic Bank home financing is a Sharia-compliant financing solution based on the diminishing Musharaka concept, where the bank and customer jointly purchase the property and the customer gradually acquires the bank's share.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal amount (AED)
• \( r \) — Monthly profit rate (annual rate divided by 12 months)
• \( n \) — Total number of months
• \( PMT \) — Monthly payment (AED)

Explanation: The formula calculates the fixed monthly payment required to repay the home financing over the specified term.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps in financial planning and ensures the monthly payment is affordable within your budget.

4. Using the Calculator

Tips: Enter principal amount in AED, annual profit rate in percentage, and loan term in years. All values must be valid (principal > 0, rate > 0, term ≥ 1 year).

5. Frequently Asked Questions (FAQ)

Q1: How is Islamic home financing different from conventional loans?
A: Islamic financing is asset-backed and avoids interest (riba), using profit-sharing or leasing models that comply with Sharia principles.

Q2: What additional costs should I consider?
A: Consider property registration fees, Takaful (insurance), and bank processing fees which are typically 1-2% of the property value.

Q3: Can I make early payments?
A: Yes, Dubai Islamic Bank allows early settlements, often with a partial rebate of the profit amount.

Q4: What is the typical financing tenure?
A: Tenures usually range from 5 to 25 years, depending on the customer's age and income.

Q5: How is the profit rate determined?
A: The rate is based on EIBOR (Emirates Interbank Offered Rate) plus a bank margin, and varies by customer profile and property type.