Frequently Asked Questions on Real Estate Finance:

1. What is Real Estate Finance?
Real Estate Finance operates like a rent-to-own home purchase plan. The bank buys the property from the seller and leases it to the customer, with the agreement culminating in ownership at the end of the finance tenure.

2. How is Real Estate Finance different from conventional mortgages?
In a conventional mortgage, the customer repays the loan with an added interest charged by the bank.
In contrast, Real Estate Finance adheres to sharia principles, where interest (riba) is prohibited. The bank purchases the property on the customer’s behalf and leases it to the customer, with rent determined for each lease renewal period.

3. What types of Real Estate Finance does SIB provide?
SIB Islamic Home Finance is based on ijarah principles. Under this arrangement, the bank purchases the property and leases it to the customer for an agreed rent, which is subject to change during each lease renewal period.

4. Can non-Muslims apply for Real Estate Finance?
Yes, SIB Real Estate Finance is available to all customer segments, including individuals of any nationality and religion, whether salaried or self-employed.

5. What is the eligibility criteria for Real Estate Finance?
Eligibility varies based on the customer’s profile. Visit SIB general terms & conditions for detailed eligibility information based on customer segments and property types.

6. How much deposit is required for Islamic Home Finance?
The deposit requirement depends on the customer’s nationality, property type, and value:

• Residential Property:
  • UAE Nationals:
    • First house/owner occupier: Property ≤ AED 5 million: minimum 15%, Property > AED 5 million: minimum 25%
    • Second/subsequent houses or investment property: minimum 35%
  • Expatriates:
    • First house/owner occupier: Property ≤ AED 5 million: minimum 20%, Property > AED 5 million: minimum 30%
    • Second/subsequent houses or investment property: minimum 40%
• Non-Residential Property:
  • New Purchase:
    • UAE Nationals: up to 35%
    • Expatriates: up to 40%
  • Equity Release (Ready Non-Residential Property):
    • UAE Nationals: up to 40%
    • Expatriates: up to 45%
  • Equity Release (Non-Residential Land):
    • All nationalities: up to 50%

7. What happens if I cannot make my payments?
Failure to make payments may result in:

• Your account going into arrears, which could affect your credit rating and limit future financing opportunities.
• Loss of your property, which may be repossessed by the bank.

8. Is takaful required for Real Estate Finance?
Yes, both property and life takaful are mandatory for the duration of the finance and must remain valid until the finance is fully settled.

9. Can I settle my Real Estate Finance early?
Yes, early settlement is permitted, subject to a fee as per the bank’s prevailing charges.

10. What types of properties are eligible for Real Estate Finance?
SIB offers finance for:

• Ready residential properties (villas, townhouses, or apartments)
• Residential and non-residential land
• Office spaces (serviced offices)
• Retail spaces (shops or retail stores)

11. How is SIB Real Estate Finance profit rate applied?
SIB Home Finance is offered at a reducing profit rate.

• Flat Rate: The profit rate remains constant throughout the finance term and is calculated on the original principal amount.
• Reducing Rate: The profit is calculated on the outstanding balance, which decreases as settlement/repayments are made. Reducing rates typically reflect the actual cost of finance more accurately than flat rates, even if the advertised flat rate appears lower.