Knowledge and FAQ

Afiyah's Knowledge and FAQ page provides you with essential information and guidance to navigate the world of Sharia-compliant financial solutions. Empower yourself with the knowledge you need to make informed decisions and secure your financial future.

What are the benefits of Islamic Finance in Australia?

Islamic Finance in Australia allows you to purchase a home in a manner that aligns to your faith.

Ijara Muntahia-bi-tamleek is a Sharia-compliant financing option in available to Australians that avoids riba (interest), adhering to Islamic principles. It offers flexibility in profit rates—both fixed and variable—to suit different financial situations. Its structure is similar to conventional leasing, making it straightforward and accessible within various legal frameworks.
  • What documents will I be required to provide?

    Each situation is unique and therefore a list of documents will be provided to individuals in the process.

    For individuals:

    • Applicant ID verification
    • Employment details to verify the date of joining, designation, and name of the company
    • Original or certified salary slip showing financial strength of the individual
    • Bank statement of the salary account for the last 12 months
    • Previous year tax returns

    For Companies

    • Applicant ID verification
    • Company details and financials
    • Bank statement of the account for the last 12 months
    • Previous year tax returns
    • GST registration

    How does Afiyah ensure that its financial solutions comply with Sharia laws?

    Afiyah ensures that all recommended financial solutions strictly adhere to Sharia compliance requirements. We conduct thorough due diligence to verify that every product offered by our panel of lending providers is in full alignment with Sharia principles. This meticulous approach guarantees that the financial solutions we suggest are consistently compliant and align with our commitment to upholding Islamic financial laws.

    What finance options are available under an agreement?

    You have the option to choose between principal and rental instalments or rental-only instalments. Afiyah will discuss these options with you to determine the most suitable choice based on your circumstances.

    Who are our partners in Islamic Finance?

    We collaborate with various partners across Australia to ensure both Shariah and legal compliance. We aim to broaden our options to assist as many clients as possible, accommodating their specific circumstances.

    Can rental rates change in an contract due to fluctuations in reserve bank rates?

    Rental rates in an Ijarah contract can change in response to economic conditions, including adjustments in reserve bank rates.

    According to the AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) standards, specifically Shariah Standard No. 9 on Ijarah and Ijarah Muntahia Bittamleek, it is permissible to adjust rental rates based on predetermined benchmarks, which may include market rental rates or other economic indicators influenced by reserve bank rates.

    This allows the rental agreements to adapt to changes in the economic environment, ensuring fairness and financial stability.

    How are rental charges calculated and debited?

    Rental charges are calculated daily by applying the rental rate to the outstanding principal amount at the end of each day. The daily rental rate is determined by dividing the applicable rental rate for the finance facility by 365. These charges accrue daily from the day funds are advanced, regardless of any associated real estate transactions.

    Rental charges are debited monthly in arrears on the same day of the month as the Settlement Date and on the Final Payment Date. If this day falls on a non-business day or a date that does not exist (like the 31st of June), charges will be debited on the last business day of that month. Additionally, rental charges may be debited on the dates of any account switch, split, default, when the Total Amount Owing is paid, or if there is an increase in the Amount of Finance or changes to the agreement. Default rental charges apply if payments are overdue and continue until the overdue amounts are fully paid.

    What are the redraw and offset options available with a Islamic Finance facility?

    The Islamic finance facility may offer both redraw and offset options:

    Redraw Facility: You can access extra payments you've made towards their finance facility, subject to terms and conditions set by the provider.

    Offset Sub-Account: You can potentially reduce their rental charges by linking your finance balance with a credited offset account.

    These options are designed to provide flexibility in managing finance payments and can be adjusted according to the provider’s policies.