# Diminishing Musharaka, in plain words: how MIB co-owns your home

> With MIB's Ujaalaa Hiyaa, you and the bank buy the home together. Each month you pay rent on the bank's share and buy a little more of it, until the home is yours. How the partnership works, what you pay, and why the home is mortgaged.

Source: Maldives Real Estate News, published by Binga Properties. URL: https://news.binga.mv/mib-diminishing-musharaka-plain-words
Published: 2026-10-18T07:35:03.626Z · Updated: 2026-10-18T07:35:03.626Z · Event date: 2026-10-18

Maldives Islamic Bank (MIB) does not lend money at interest. Its home financing, Ujaalaa Hiyaa, is a **Diminishing Musharaka**: a partnership that shrinks month by month.

## Four steps

1. **You and MIB buy the home together.** Your equity, at least 10%, is your share. MIB's money buys the rest.
2. **You live in the whole home** and pay MIB **rent** for its share. That rent is MIB's profit.
3. **Each month you also buy back part of MIB's share** at its original cost.
4. **When MIB's share reaches zero,** the home is entirely yours.

MIB's 2025 annual report describes it the same way: the customer buys the bank's ownership units gradually at cost, and the bank's remaining units are leased to the customer.

## What that means each month

As your share grows, MIB's shrinks, so the **rent part falls** and the **buy-back part rises**. In practice the bank sets an even monthly payment for the term, much like an ordinary loan instalment. MIB publishes the rate as a **profit rate of 9% to 10% a year**.

## Why the home is mortgaged

MIB's own process ends with **"mortgage after completion of registration"**. Once the title is registered, the home secures the financing. If payments stop, the bank can enforce against the property, as with any home loan.

## Why takaful is part of it

Because MIB owns a share of the home, it needs the home covered for as long as it does. That is why **takaful for the full term must be paid before the money is released**.

## Is it cheaper than a conventional loan?

Not necessarily. The structure is different; the cost depends on the rate, the term and the fees. Compare the **monthly payment and the total repaid** across lenders, not the label.

*As published by Maldives Islamic Bank on 18 October 2026. Rates and terms change; confirm them with MIB before you commit. General information, not financial advice.*

## Sources
- www.mib.com.mv/personal-financing/ujaalaa-hiyaa (MIB Ujaalaa Hiyaa, read 18 October 2026) (https://www.mib.com.mv/personal-financing/ujaalaa-hiyaa (MIB Ujaalaa Hiyaa, read 18 October 2026))
- www.mib.com.mv/downloads/455/download (MIB Annual Report 2025) (https://www.mib.com.mv/downloads/455/download (MIB Annual Report 2025))
- www.mib.com.mv/downloads/358/download (MIB Annual Report 2024, p.12) (https://www.mib.com.mv/downloads/358/download (MIB Annual Report 2024, p.12))
- www.mib.com.mv/downloads/29/download (MIB Home Financing application form) (https://www.mib.com.mv/downloads/29/download (MIB Home Financing application form))

Binga Properties is a real-estate concierge; it may represent homes and developments mentioned here.