Islamic home finance for first home buyers

Last updated 2 November 2026 · Reviewed by Riyadh Financial Services Compliance

How does Islamic home finance work for a first home?

It works the same way as for any other home:

1. You find the property and agree the price.
2. At settlement, you become the registered owner. The financier holds a registered mortgage and a beneficial interest (an ownership share) in the property.
3. You pay rental on the financier's share, either Principal and Rental or Rental Only for a period. Principal and Rental payments reduce the amount financed.
4. When all payments are made, the mortgage is discharged and the property is fully yours.

How much do you need to save?

You'll need your own contribution towards the price and the purchasing costs. How much depends on the property, how much you finance compared with its value and your financial situation.

If you finance a high proportion of the property's value, a risk fee may apply instead of lenders mortgage insurance. Your broker will explain what applies to you.

Can you get government help as a first home buyer?

Some help depends on your state or territory, not on the type of finance:

• Stamp duty concessions or exemptions for eligible first home buyers, set by each state and territory.
• First home owner grants, usually for new homes, also set by each state and territory.
• The First Home Super Saver Scheme, which may let you use voluntary super contributions towards a deposit. The ATO website explains how it works, and your accountant can tell you whether it suits you.

The Australian Government's Home Guarantee Scheme is only available through participating lenders. Our Ijaar home finance isn't currently part of it. Your broker can explain your options.

What costs should you plan for?

• Purchasing costs, such as stamp duty (unless a concession applies), legal or conveyancing fees and government registration fees.
• Fees for the finance, such as valuation, establishment and settlement fees, and a risk fee if it applies.
• Building and pest inspections before you buy.
• Conventional property insurance. Takaful isn't currently available through our products.
• Ongoing costs of owning a home, such as council rates, strata levies and maintenance.

Can you build your first home?

Yes. Construction is available on selected Ijaar home finance for fixed-price building contracts. The financier pays your builder in stages as the work progresses.

For house-and-land packages with accredited builders, HomePay offers a rental deferral period during construction. The deferred rental is calculated upfront and included in the finance amount, so you pay more over the life of the finance. Your broker can explain whether it suits you.

What will you need?

• To be an Australian or New Zealand citizen, a permanent resident, or one of some temporary visa holders living in Australia
• Income from employment or self-employment
• Your own contribution towards the price and costs
• A credit history the financier will assess

Your broker will confirm the documents you need.

How do you get started?

1. Talk to your broker, or contact us and we can refer you to an accredited broker. Talk them through your goals and your budget.
2. Get a sense of what you can finance before you start making offers.
3. Find your home, and get your solicitor or conveyancer to check the contract.
4. Apply. Your broker submits your application, and the financier arranges a valuation.
5. Approval and settlement. If approved, you sign your documents, and at settlement you become the registered owner.

General information only. It isn't financial, tax or religious advice and doesn't consider your objectives, financial situation or needs. Fees, charges and credit criteria apply.