Updated: Jul 13, 2023
Eliminating debt has become a formidable challenge in today's world, and while completely eradicating debt may not be feasible for everyone, some strategies can significantly reduce it. Our tool that can assist in this endeavor is assessing the benefits of property ownership versus renting. Although this tool may appear simple, the decision it leads to can result in substantial savings. For Muslims, debt and mortgages hold specific implications due to Islamic principles. Unfortunately, interest-free mortgages or truly Halal mortgages are not widely available. This adds another layer of complexity to the decision-making process. Regardless of religious beliefs, everyone requires a place to call home, whether through ownership or renting. However, the housing decision is critical, as it can negatively impact one's entire financial profile if not handled properly. Although you enjoy the property, it is essential to acknowledge that interest, known as riba in Islamic finance, has one-sided benefits to the mortgage provider. While making every effort to meet monthly mortgage payments may require immense dedication, this effort and commitment may not be worthwhile from an Islamic perspective. Such financial obligations do not align with the Islamic ruling on riba, making it a morally and religiously challenging aspect. When confronted with debt, individuals must consider alternative approaches that adhere to their religious and ethical beliefs. Exploring options like Islamic financing, which complies with Shariah principles, may provide a more suitable solution for Muslims seeking to eliminate debt but difficult to find. While completely discarding debt may be daunting, reducing it through various strategies is possible. Individuals, particularly Muslims, must carefully weigh the financial and ethical implications of debt and mortgages when considering housing options. Individuals can strive towards a more financially stable and spiritually fulfilling future by aligning their decisions with their religious principles.
This calculator is designed to help people planning to purchase a property decide whether to buy a property with the mortgage or keep renting until adequate finances are built up.
Observe the change by modifying a few values in the input field to learn about how does impact your selection vs. result. Try changing the Mortgage amount and the Rent per month to observe the difference between the available options, whether buying is better or renting. For example, if rent is $4500 instead of $2000, then Buying and Renting recommendation changes. Observe savings on Buying vs. Renting and make the judgment call whether Buying is recommended or Renting. If the difference in savings is slim, then Buying is recommended and vice-versa. The outcome gives a financial comparison. The calculator will give accurate results for an amortization period of 15 years because it is optimally configured at this amortization period.
DISCLAIMER: We strive to offer users accurate information to the best of our knowledge. However, laws are subject to change; therefore, the user assumes full responsibility and should utilize the information on our website and this tool as a reference per our terms and conditions. If you believe any part of the calculation is incorrect or contains errors, we kindly request your feedback here.