Equity and Shared Rental Ownership Calculator

Welcome to Al Mumin Islamic Financing’s Equity and Shared Rental Ownership Calculator! This tool is designed to help you manage your path to full homeownership through our unique equity and rental payment model. By entering your initial investment, monthly contributions, and tracking property value changes, you can see how your ownership stake grows over time and how your rental payments adjust accordingly.

How It Works

Our financing model blends equity ownership and rental payments. As your equity in the property increases, your rental payments decrease, reflecting your growing ownership share. The goal is to transition to full ownership, at which point all rental payments will cease.

Calculator

Initial Setup

  • Property Value: Enter the current market value of the property.
  • Initial Investment: Enter the amount you are investing initially (must be at least 40% of the property value).

Monthly Contributions

  • Monthly Payment: Enter the total amount you can pay each month.
  • Equity Contribution: Enter the portion of your monthly payment that will go towards increasing your equity.

Calculation Breakdown

  • Current Equity Share: Displays your current ownership percentage.
  • Rental Payment: Shows the portion of your monthly payment that goes towards rent (for the portion you do not own).
  • Updated Equity Share: Calculates your equity share after each monthly payment.
  • Updated Rental Payment: Adjusts the rental payment based on the new equity share.
  • Property Value Change: Enter the annual percentage change in property value (increase or decrease).

Example Calculation

Initial Setup

  1. Property Value: $500,000
  2. Initial Investment: $200,000 (40% of the property value)
  3. Monthly Payment: $2,000
    • Equity Contribution: $1,500
    • Rental Payment: $500 (initially)

Yearly Calculation

  1. Initial Equity: 40%
  2. Annual Equity Contribution: $18,000 (12 months x $1,500)
  3. End of Year Equity: 46% (40% initial + 6% additional)
  4. Adjusted Rental Payment: Based on the new equity share
  5. Property Value Change: Assume a 5% annual increase
  6. New Property Value: $525,000 ($500,000 + 5%)

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