What is diminishing Musharaka?

A partnership between you and the bank in owning the property: you gradually buy out the bank's share in instalments while paying rent on the share it still owns, until you become the sole owner. It is Sharia-compliant because the rent is for the bank's real ownership, not a debt.

Why does the payment decline over time?

Because each month you buy out part of the bank's share: its share shrinks, so the rent due on it shrinks, while the buy-out instalment stays constant; their sum falls.

Is the rent rate official?

No. There is no single national rate; each bank sets it. The default here is indicative for simulation only — enter the actual rate from your bank's offer.

Does the result include fees and insurance?

No. The simulation estimates the payments and rents, assuming an equal share buy-out. File-study fees and takaful insurance may apply, and the contract structure may vary; ask for the full offer.

Which banks offer diminishing Musharaka?

Islamic banks (Al Salam, Al Baraka) and the Islamic windows of public banks accredited by the National Sharia Authority, mainly for home financing.

Islamic finance

Diminishing Musharaka Simulator

Compute the declining monthly payment and total cost of a diminishing Musharaka Islamic financing to buy a home.

Indicative estimate · 2026

Reserve this ad spaceAdvertise here

Bank / Islamic window

Property price

Total value of the home

Your share (initial down payment)

What you own at the start; the rest is the bank's share

Term (years)

per year

Term to buy out the bank's share

Annual rent rate on the bank's share (%)

Set by the bank; leave empty for an indicative rate

Monthly income (optional)

To estimate your repayment capacity (≈ 40% of income)

First monthly payment (highest)

48,667DA

Bank's share (financed)71%

Total rents29%

Your share (down payment)1,200,000DA

Bank's share (financed)4,800,000DA

Applied rent rate5.5%

First monthly payment (highest)48,667DA

Last monthly payment (lowest)26,789DA

Average monthly payment37,728DA

Total rents1,991,000DA

Total cost6,791,000DA

Rent share of the bank's share41.5%

NoteThe payment declines as you buy out the bank's share, until you fully own the property at the end.

NoteIndicative simulation with equal share buy-out, not an offer: the rent rate is set by the bank, and fees plus takaful insurance may apply. Check with your bank for the official offer. This is not a fatwa — the products are certified by the bank's Sharia board and the National Sharia Authority.

Total cost6,791,000DA

hsabet.com

Share on WhatsApp

Follow Algeria's job market

Employment news, recruitment competitions, and labor market updates on SFN Emploi.

Read the news

How it works

Enter the property price, your share (down payment) and the term.
Enter the rent rate on the bank's share (or keep the indicative rate).
We compute the bank's share = price − your down payment, the buy-out instalment = share ÷ months, and the rent on the declining remaining share; the payment falls month by month.

Sources: Bank of Algeria regulation no. 20-02 (15 Mar 2020) on Islamic finance · Islamic banks' products. Rent rates are set by the bank.

Banque d'Algérie (opens in a new tab)

Hsabet is not affiliated with any of these official organizations – cited for reference only.

Frequently asked questions

Related calculators

Mourabaha Simulator

Compute the monthly instalment, profit margin and total cost of a Mourabaha Islamic financing by bank.

Banque d'Algérie

Ijara Simulator (lease-to-own)

Compute the monthly rent and total cost of an Ijara Muntahia Bittamlik Islamic financing by bank.

Banque d'Algérie

Notary Fees Calculator

Estimate property purchase costs: registration, land-registration tax, and notary fees.

DGI

This tool simulates a diminishing Musharaka (Musharaka Mutanaqisa) financing to buy a home: the bank co-owns the property with you, you gradually buy out its share in instalments, and you pay rent on the share it still owns. As you buy out the bank's share, its share — and therefore the rent — declines, so the monthly payment falls over time. Interest-free (no riba): the rent is for using a share the bank genuinely owns.

Enter the property price, your share (down payment), the term and the rent rate on the bank's share (set by the bank). The result is indicative — a simulation, not an offer.