An Alternative Method of House Financing Calculation in an Islamic Bank

摘要

Home financing in Islamic banking is an alternative for Muslims who intend to buy a house without the element of interest. However, the method of financing calculation still must purify because the current calculation method still refers to the conventional calculation method. Besides that, a portion of interest payment is higher than the capital return in the early period of payment. Therefore, the diminishing balance will decrease slightly in the early period of payment. The common method for loan housing, which are conventional method. Bai' Bithaman Ajil (BBA). Musharakah Mutanaqisah Partnership (MMP) and Zubair Diminishing Balance Method (ZDBM) are analyzed. After the comparison made between the four methods, a new method is proposed. Results reveal that all the four methods have their own issue. Despite that, they are better than the conventional contract. The new suggested method will concern about a benefit between customer and bank.