Interest-free Islamic mortgage simulator

This project began as a personal obligation. For fifteen years I avoided a conventional mortgage, kept renting, and eventually bought my home with cash in 2021. The remaining question was practical: could halal financing be modeled clearly and compared honestly with a conventional mortgage? That led me to build two live tools: the Islamic Mortgage Simulator and Loan Agreement Generator.

Allah has permitted trade and forbidden riba ... if you do not, then be informed of a war from Allah and His Messenger.

Over several years, I studied with scholars, reviewed primary sources, and worked through fiqh on Musharaka and Ijarah structures. In summer 2025, I began implementing the model and launched the platform in January 2026 after validating the calculations and edge cases.

The mortgage simulator models Diminishing Musharaka as co-ownership: monthly buyout transfers equity, rent is charged only on the financier's remaining share, and property costs are split by ownership percentages. It also compares the same scenario against a conventional mortgage so users can inspect monthly and cumulative differences in structure and outcomes.

The loan agreement generator turns Quran verse 2:282 into a practical workflow with clear debt terms, witness rules, and written documentation in a downloadable PDF. Both tools are free to use and designed to help Muslims evaluate real decisions with clarity instead of slogans.

O believers! When you contract a debt for a fixed term, put it in writing.

I also published several long-form articles covering riba vs profit, bank deposits, and halal wealth-building to document the reasoning behind the tools and make the research accessible.

The longer-term goal is to open-source the model so small cooperatives and community organizations can build their own Shariah-compliant products without depending on institutions whose compliance is uncertain.

Challenges

• Most "Islamic mortgage" calculators collapse rent and interest into the same model, which makes it hard to represent a genuine co-ownership structure.
• Ownership percentages change monthly, so proportional sharing of insurance and property taxes cannot be computed with static assumptions.
• Users needed realistic forecasting without conflating unrelated variables like rental inflation and home-price appreciation.
• Generating a practical Islamic loan contract required converting verse-level guidance into valid form constraints and printable output.

Solutions

• Modeled Diminishing Musharaka from first principles, treating rent as payment for asset usage based on fair market rent and keeping it separate from ownership buyout logic.
• Built a month-by-month engine that recalculates ownership at each step, then applies proportional property-cost allocation and rolls up cumulative totals.
• Split rent growth and property appreciation into independent controls with preset scenarios, so comparisons stay explicit and mathematically traceable.
• Implemented witness-rule validation, required debt-term inputs, and PDF generation with clear signatures and arbitration clauses to support real-world use.