Buying a property in the UAE is a major financial decision, and buyers looking for a Shariah-compliant alternative to conventional mortgages may consider Islamic home finance. Emirates Islamic Investment PJSC, commonly known as Emirates Islamic, provides home finance solutions in the UAE based on Islamic finance principles.
Rather than structuring the facility as a conventional interest-bearing mortgage, Emirates Islamic describes its home finance around Ijarah Muntahiya Bittamlik, a lease-to-own structure. The bank purchases the property and leases it to the customer for an agreed period, with payments incorporating the property’s cost and the bank’s profit margin. Once the relevant obligations are fulfilled, ownership transfers to the customer through a Sale Agreement.
This guide explains how Emirates Islamic home finance works, who may be eligible, the documents generally required, and what applicants should consider before applying.
What Is Emirates Islamic Investment PJSC?
Emirates Islamic Investment PJSC is an Islamic banking institution in the UAE offering Shariah-compliant financial products and services. Its offerings include personal banking, business banking, investments and various financing solutions.
For property buyers, its home finance offering can be used for eligible residential properties in the UAE, including certain ready and off-plan property transactions. The bank also provides solutions for construction, refinancing and other eligible property-related requirements.
What Is an Emirates Islamic Islamic Mortgage?
An Emirates Islamic Islamic mortgage is more accurately described as Islamic home finance rather than a conventional mortgage.
The underlying structure is designed around Shariah principles. Under Ijarah Muntahiya Bittamlik, the bank purchases the property and leases it to the customer for an agreed term. The customer’s payments include rental and the bank’s profit component. At the end of the agreed arrangement, ownership can transfer to the customer according to the applicable Sale Agreement.
This structure is different from a conventional mortgage, where a lender generally provides a loan that the borrower repays with interest.
Islamic Mortgage vs Conventional Mortgage
| Feature | Islamic Home Finance | Conventional Mortgage |
| Basic structure | Shariah-based financing | Interest-based lending |
| Property arrangement | Bank purchases and leases the property under Ijarah | Borrower generally purchases using a loan |
| Payment structure | Rental and profit components | Principal and interest |
| Shariah principles | Designed to comply with Islamic finance principles | Not structured specifically around Shariah principles |
| Ownership transfer | Can occur according to the agreed Sale Agreement | Usually remains with borrower subject to mortgage/security |
The exact contractual terms, fees and payment calculations should always be reviewed in the provider’s current documentation before making a decision.
How Does Ijarah Muntahiya Bittamlik Work?
The Ijarah Muntahiya Bittamlik structure can be understood through several stages:
- Select an eligible property – The customer identifies a property that meets the applicable requirements.
- Submit the application – The applicant provides personal, income and property documentation.
- Property assessment – The property and application are assessed according to the provider’s criteria.
- Finance arrangement – If approved, the bank purchases the property and leases it to the customer.
- Monthly payments – The customer makes payments according to the agreed schedule.
- Ownership transfer – After fulfilling the relevant obligations, ownership transfers according to the applicable Sale Agreement.
For properties under construction, Emirates Islamic’s Key Fact Statement also describes an Istisnaa and Ijarah structure for eligible construction financing.
Who Can Apply for Emirates Islamic Home Finance?
Eligibility depends on factors such as residency status, income, employment type, property and the bank’s credit and assessment criteria.
Emirates Islamic currently lists different requirements for UAE residents, non-residents, salaried applicants and self-employed applicants. For example, its application information states minimum monthly income requirements of AED 20,000 for UAE residents applying through the listed salaried or self-employed categories, while different requirements apply to UAE Nationals and specific products.
Therefore, applicants should not assume that meeting a single income threshold guarantees eligibility. The final assessment can depend on the complete financial profile and property.
Can Non-Residents Apply for Emirates Islamic Home Finance?
Non-resident applicants may be eligible for Emirates Islamic home finance, subject to the applicable requirements.
The bank provides specific documentation requirements for salaried non-residents and self-employed non-residents. These can include passport documentation, salary or business records, overseas bank statements, liability or reference letters, tax returns where applicable and credit bureau information where applicable. Property purchase documents are also required.
Because non-resident eligibility can depend on nationality, income source, country of residence, property and other factors, applicants should confirm the current criteria before proceeding.
What Documents Are Required?
The required documents vary depending on whether the applicant is salaried, self-employed, resident or non-resident.
For a salaried UAE resident, Emirates Islamic lists documents such as:
- Valid passport and UAE residence visa or National ID
- Labour contract
- Recent salary certificate or salary transfer letter
- Recent payslips, where applicable
- Bank statements showing salary credits
- Liability letter
- Property documents
- Sale and Purchase Agreement
- Title Deed and Site Plan
- Evidence of down payment where applicable
Self-employed applicants may additionally need business documentation such as a trade licence, company constitutional documents, audited financial statements and business bank statements.
The bank may request additional documents during the application process.
What About Profit Rates and EIBOR?
Islamic home finance does not use conventional interest in the same contractual structure. However, the customer’s payment or profit component may be linked to a variable benchmark or index under the applicable arrangement.
Emirates Islamic explains that its Ijarah structure can have a rental amount incorporating the property’s cost and the bank’s profit margin, with the variable component potentially linked to an index within agreed limits.
This means prospective customers should look beyond an advertised rate and examine the Key Fact Statement, Facility Offer Letter, fees, payment structure and applicable conditions before accepting a facility.
How to Apply for Emirates Islamic Home Finance
The general process involves:
1. Check Your Eligibility
Review income, residency, employment, age, existing liabilities and property requirements.
2. Prepare Your Documents
Gather identity, income, banking and property documents relevant to your applicant category.
3. Submit Your Application
Emirates Islamic provides online and other application channels. Self-employed applicants may have specific application-channel requirements.
4. Complete the Assessment
The bank reviews the applicant’s financial information and the property details.
5. Review the Offer
Before accepting, carefully review the applicable profit, rental/payment structure, fees, conditions and other contractual terms.
6. Complete the Property Transaction
Once the required conditions are satisfied, the property transaction and Islamic finance arrangement proceed according to the applicable agreements.
What Should You Compare Before Choosing Islamic Home Finance?
Choosing Islamic home finance should involve more than comparing a headline profit rate.
Consider:
- Total cost over the finance period
- Initial contribution or down payment
- Monthly payment
- Variable versus fixed components
- Processing and other applicable fees
- Property valuation requirements
- Early settlement conditions
- Takaful requirements
- Eligibility for residents or non-residents
- Documentation requirements
- Conditions attached to the property
- Whether the structure meets your personal Shariah preferences
Applicants should also compare the contractual structure and total financial commitment rather than focusing only on the monthly payment.
Is Emirates Islamic Home Finance Right for You?
Emirates Islamic home finance may be relevant for buyers looking for a Shariah-compliant property financing structure in the UAE. Its published information covers residents, non-residents, salaried applicants and self-employed customers, subject to the applicable eligibility requirements.
However, approval is not automatic. Income, existing liabilities, employment or business profile, property details, documentation and other assessment criteria can affect the outcome.
Before applying, prospective customers should check the latest official eligibility criteria, Key Fact Statement, fees and terms because financial products and requirements can change.
FAQs
1. What is Emirates Islamic Investment PJSC?
Emirates Islamic Investment PJSC is an Islamic banking institution in the UAE offering Shariah-compliant banking and financing solutions, including home finance.
2. Does Emirates Islamic offer Islamic home finance in the UAE?
Yes. Emirates Islamic offers home finance based on Islamic finance structures, including Ijarah Muntahiya Bittamlik for eligible property transactions.
3. How does an Emirates Islamic Islamic Mortgage work?
The bank purchases the eligible property and leases it to the customer under an Ijarah Muntahiya Bittamlik structure. Payments incorporate the property’s cost and the bank’s profit component, with ownership transferring according to the applicable agreement after the relevant obligations are fulfilled.
4. What documents are required for Emirates Islamic Home Finance?
Documents depend on the applicant category. They can include passport and residency documents, salary certificates, payslips, bank statements, liability letters and property documents. Self-employed and non-resident applicants may need additional financial and business documentation.
5. Can expats and non-residents apply for Emirates Islamic Home Finance?
Emirates Islamic publishes specific requirements for both resident expatriates and non-resident salaried and self-employed applicants. Eligibility remains subject to the bank’s current criteria and assessment.
