Looking for answers about Islamic finance in Australia?

While some banks may allow you to build your own home, this option is not for the faint-hearted. Most banks prefer that you use a licensed
builder to ensure the home you build will be a good security property for a long time.  

 It’s not always necessary to purchase a house and land package from one location, although it can simplify your home loan options. You might find land you prefer elsewhere or choose a different builder. The choice is entirely yours. 

Construction finance work differently from regular home finance for established houses. When you buy an established house, the financier extends the
amount of money you finance to complete the purchase, and you simply move into your new home. 

With construction finance, your financier will set up progressively drawn payments that add up to the total amount you financied. As your builder constructs your home, your financier receives an invoice for each stage of construction as it’s completed. Your finance is drawn several times until the builder is paid, your house is complete, and you can move in once all stages are finalised.  

Progress payments allow you to use your construction finance to pay for specific stages of your build or renovation at various steps of completion. You make repayments only on the amount you’ve drawn down, rather than the total construction finance amount you’re approved for, helping to keep costs down. 

Progress payments can be requested in various ways, as advised in your ‘Builders Commencement Letter’. If your builder needs money upfront to issue plans, you’ll need to cover that yourself. If you’re contributing any of your own money, do so before the first progress payment is made. 

The final progress payment is subject to a satisfactory final inspection from the financier's valuer, confirming the construction has been completed as per the original plans and specifications. You’ll also need a new building insurance policy.  

The building process is split into standard construction stages.  

1. Foundations/Slab: Laying the foundation, levelling the ground, plumbing, and waterproofing the foundation. 
2. Frame: Building the frame, partial brickwork, roofing, trusses, and windows. 
3. Lockup: Installing external walls, lockable windows, and doors. 
4. Fitout: Adding gutters, plumbing, electricity, plasterboards, and partially installing cupboards. 
5. Practical Completion/Final Stage: Completing finishing touches, final plumbing, electricity, overall cleaning, and making final payments for equipment and builders.  

There is an inherent risk with owner builders frequently changing their building plans, susceptibility to cost overruns, or even not completing the construction on time and within the original budget.  

There are a limited number of financiers that accommodate owner builders. Within the Islamic finance space, there is only a specialist financier that supports owner builders, but they impose very strict rules. These rules include prior building experience, an additional buffer of funds, or having a licensed builder supervise the project.  

You have the choice of either:  

• Variable: Adjusted monthly
• Fixed: Lock-in periods between 1 and 10 years 
• Split: A combination of fixed and variable terms is available  

 Yes. Additional repayments are allowed.  

• On fixed rental terms, extra repayments are capped at $10,000 per year. 
• Extra payments permanently reduce the lease term and cannot be redrawn.  

Yes, provided the rental use is lawful and sharia compliant, you may lease the property to others. 

Yes. You can sell the property at any time by settling the outstanding finance balance with the financier. 

• Pre-assessment: Quick eligibility check. 
• Application: Gather and submit documents. 
• Conditional approval: Lender’s initial green light. 
• Valuation: Independent property appraisal. 
• Final approval: Lender’s formal approval. 
• Contract signing: Legal and Shariah-compliant contracts. 
• Settlement: Loan funds released, property purchased. This process ensures compliance with both

Shariah principles and Australian regulatory requirements, providing a transparent and ethical pathway to Islamic finance in Australia.

FEATURE AVAILABLE?      

❌ Interest Only Currently this is not available. 

                                                  We are working on how we can provide this feature within the Sharia compliant principals while adhering to Australian laws.     

❌ Redraw Facility Prohibited under Sharia Compliant principals as redraw acts like a conventional loan     

❌ Offset Account Offset is a function of receiving interest on the money in the offset account, and hence prohibited under Sharia compliant principals.      

❌ Line of Credit A Line of Credit is like a redraw facility and prohibited under Sharia compliant principals.

✅ Fixed Rental Terms 1-10 years is Available      

✅ Split Rental Terms Available for tailored loans     

✅ Internet Access Secure online access provided    

Late fees may apply but must stay within sharia limits. Continued non-payment could lead to termination of the lease and repossession. 

You are responsible for day to day maintenance, insurance, council rates, and any taxes. These obligations are part of your role as the Wakeel. 

 The property is registered in your name as Wakeel (agent) of the financier during the lease period.

 

Due to additional governance and certification costs, Islamic loans may have slightly higher administrative fees. However, the lending criteria are applied consistently
across both Islamic and conventional loans. 

Yes. All Islamic loans offered by Crestmount Money comply with Australian financial regulations while remaining fully sharia compliant.  

No. Certifying an Islamic loan requires more than religious knowledge. Only scholars with specialised training in sharia compliance, Islamic economics, and a deep understanding of Australian financial, property, and tax laws are qualified to assess and certify Islamic finance products. This process involves aligning complex regulatory and legal frameworks with sharia principles. As such, certification should be carried out by qualified institutions or scholars with recognised expertise in both Islamic and conventional finance to ensure the product is both sharia compliant and legally sound in Australia. 

Yes. Islamic finance structures like Ijarah finance, Murabaha finance and Musharaka finance can be used for:  

• Equipment leasing 
• Commercial property
• Development and construction projects 
• Islamic investment funds 
• Sharia compliant superannuation strategies  

Islamic finance is built on the principle of equitable risk-sharing, setting it apart from conventional banking models. However, in practice, particularly in Australia and across much of Southeast Asia, this ideal is often constrained. Regulatory capital requirements and the high cost of capital make full risk-sharing structures impractical for retail and small business financing, as they would significantly increase the overall cost of finance.

That said, more balanced risk-sharing is typically found in private financing arrangements and large-scale corporate facilities, where financiers participate through equity-based structures or joint ownership in the assets or ventures being financed.  

 Profit is generated through asset-based contracts. For example:  

• Ijarah Finance, profit is earned via rent 
• Murabaha Finance, profit is included in the asset sale price
• Diminishing Musharaka, profit earned via a dividend payment  

Islamic finance avoids interest and speculative industries. Instead, it is based on tangible assets like property, using contracts such as lease (Ijarah) or sale
(Murabaha). Conventional loans are interest-based and do not necessarily align with ethical or religious standards. 

Choosing an Islamic loan is a matter of faith. Just as Muslims would not eat pork regardless of cost, they should not engage in interest-based lending. 

Yes. Crestmount Money’s halal finance products are available to all Australian. Our services are provided online at your convenience.

Ensure that the financier operates under the guidance of a qualified, independent Sharia Supervisory Board (SSB). Crestmount Money’s products are certified by Amanie Advisors, led by renowned Islamic scholar Datuk Dr. Mohd Daud Bakar.  

 While Islamic finance is inherently ethical, it has distinct religious requirements. It involves:  

• Transparent, asset-backed transactions 
• Avoidance of speculation (gharar) and unethical industries 
• Promote fair risk sharing between parties  

Theoretical Ideal

Islamic finance is fundamentally based on the principle of shared risk and reward between the financier and the customer. This model is designed to foster fairness and ethical engagement, in contrast to conventional finance, where the borrower typically bears the bulk of the financial risk.

Practical Constraints

In Australia, Islamic financial institutions operate under stringent regulatory frameworks established by APRA and the Reserve Bank of Australia, as well as global standards such as Basel IV. These regulations require robust capital adequacy, risk management, and consumer protection measures, limiting how much risk a financier can genuinely assume.

Impact on Risk-Sharing

As a result, Islamic home and asset financing products in Australia are commonly structured to reduce the financier’s exposure to risk, often mirroring conventional practices. Structures like Ijarah (lease-to-own) and Diminishing Musharakah are widely used, but the risk of default or asset devaluation is managed through mechanisms that closely align with traditional mortgage lending.

Regulatory Alignment

Under Basel IV, Islamic finance providers must maintain sufficient capital reserves and risk sensitivity, just like conventional banks. Consequently, while the spirit of risk-sharing remains central to Islamic finance, its practical application in Australia is shaped by the same regulatory pressures that govern the broader financial system, thereby limiting full implementation of equitable risk-sharing models. 

Prohibited industries include:

• Alcohol production or sales 
• Gambling, casinos, and lotteries 
• Pork and related products 
• Pornography, Tobacco and harmful substances 
• Weapons manufacturing and arms trading 

Prohibited financial practices include:

• Interest-bearing lending (riba) 
• Speculation or high-risk trading (gharar) 
• Conventional insurance 
• High-risk derivatives or futures contracts  

 Risks include:  

• Fines for late payments (within Sharia limits) 
• Potential repossession for serious defaults 

Always review the terms and conditions of your agreement carefully before proceeding.  

• Ijarah Finance (Rent-to-Own): The financier purchases the property and rents it to you. Once the rental term is complete and all payments are made, ownership is transferred to you. This is the most common structure for Islamic home finance. 
• Diminishing Musharakah (Declining Partnership): Both you and the financier co-own the property. Over time, your payments reduce the financier’s share while increasing your ownership. This structure is often used in SMSF property finance. 
• Murabaha (Cost-Plus Profit): The financier purchases the asset and sells it to you at a pre agreed markup. Payments are made in instalments over a fixed term. This model is generally used in asset finance. 
• Tawarruq: is an Islamic finance structure where the process of purchasing a commodity for a deferred price and selling it to raise capital for a specific project. Used in more complex or corporate finance arrangements.  

 An Islamic loan in Australia follows sharia compliant principles, meaning it does not involve riba (interest), which is strictly prohibited in Islamic finance. Instead, finance is structured around tangible assets to ensure all transactions align with Islamic finance principals.  

 Applicants must be:  

• Australian citizens or permanent residents 
• Earning a stable income 
• Able to meet the financier’s credit criteria 
• Willing to comply with sharia compliant lending terms  

Most sharia compliance certifications are issued by international organisations due to a lack of AAOIFI certified institutions in Australia that specialise in financial contract certification. While Australia has respected Islamic scholars and community leaders, it currently lacks the institutional infrastructure and depth of expertise required to assess complex financial products in accordance with both sharia principles and Australian regulatory frameworks. International certification bodies bring globally recognised standards and the specialised knowledge necessary to ensure financial products are truly sharia compliant.  

In Islamic finance, money is viewed solely as a medium of exchange and not a commodity in itself. Earning more money from money through interest is considered unjust. Instead, profit is earned through legitimate trade, leasing, and investment in halal (permissible) assets or services. 

 Assets eligible for Islamic finance include:  

• Residential, commercial, industrial, retail properties
• Business vehicles and equipment 
• Other tangible, sharia compliant goods  

You can finance residential homes, investment properties, construction projects, and select commercial assets with Crestmount Money.  

1. Determine Your SDA Funding Level

Before applying for an SDA home loan, it’s essential to understand your SDA funding level within your NDIS plan. This will determine the type of property you can afford and the financing options available.  

2. Choose Between Buying, Building, or Renovating

 There are different ways to secure an SDA home finance, depending on whether you want to:  

• Buy an existing SDA property – Ensure the home is already NDIS-enrolled as an SDA dwelling. 
• Build a new SDA compliant home – Work with a builder who understands SDA Design Standards. 
• Renovate an existing home – Meet minimum refurbishment costs to qualify for SDA payments.  

3. Secure Financing for Your SDA Home

Crestmount Money offers specialised SDA home loans tailored to NDIS participants. Key factors to consider when financing your SDA home include:  

• Loan-to-Value Ratio (LVR) – We finance up to 90% of the property’s market value, one of the highest available. 
• Deposit Requirements – SDA properties often require a larger upfront deposit. 
• Alternative Security – Family members can provide additional security through a mortgage on another property.  

SDA home finance is a specialised financing solution designed for NDIS participants with approved SDA funding in their plan. This funding can be used to purchase, build, or renovate a home that meets NDIS SDA Design Standards, ensuring it is suitable for individuals with high support needs.  

For individuals with disabilities, Specialist Disability Accommodation (SDA) financing offers a pathway to owning a fully accessible home. Whether you’re an NDIS participant looking to buy an SDA compliant home or a family member investing in a loved one’s future, Crestmount Money provides tailored SDA home loan solutions to help you navigate the process with ease.  

Yes. Crestmount Money offers sharia compliant finance solutions for investment properties, including those held within SMSFs.