Rental index rate as an alternative to interest rate in Musharakah Mutanaqisah home financing

• Main Authors: Mohd Yusof, Rosylin, Mahfudz, Akhmad Affandi, Che Mohamed Arif, Ahmad Suki, Ahmad, Nor Hayati
• Format: Article
• Language: English
• Published: Emerald Group Publishing Limited 2016
• Subjects: BP Islam. Bahaism. Theosophy, etc; HG Finance
• Online Access: http://repo.uum.edu.my/21900/1/IJIMEFM%209%203%202016%20397%20416.pdf; http://repo.uum.edu.my/21900/; http://doi.org/10.1108/IMEFM-11-2015-0141

Purpose This paper aims to propose a new pricing alternative called Rental Rate Index (RR-I) that captures the true value of property to be used by Islamic banks in Musharakah Mutanaqisah (MM) contract for home financing. Design/methodology/approach By formulating a profit rate based on Rental Index...