Musharakah Mutanaqisah
مشاركة متناقصة
Pronunciation: moo-SHAH-rah-kah moo-tah-NAH-ki-sah
Diminishing partnership — a widely used halal home financing structure.
Definition
Diminishing partnership. A form of Musharakah where one partner's share decreases over time as the other partner buys it out. This is a widely used halal home financing structure.
The buyer and provider co-purchase the property; the buyer's ownership percentage increases with each payment until they own 100%. Monthly payments typically consist of two components: (1) a payment that increases the buyer's equity stake, and (2) a rental payment for the provider's share of the property. Because the arrangement is structured as a partnership (not a loan), there is no interest (riba) involved.
Related Terms
Musharakahمشاركة
A joint partnership where all parties contribute capital and share profits and losses proportionally.
Diminishing Partnershipمشاركة متناقصة
A co-ownership arrangement where the buyer gradually purchases the provider's share — a common halal home financing structure.
Ijaraإجارة
A lease or rental agreement — one of the three main halal home financing structures used in Canada
Halal Mortgage
A home financing arrangement structured to avoid interest (riba), typically using diminishing partnership or lease-to-own models.
Compare Related Products
See how Musharakah Mutanaqisah is used in real Shariah-compliant financial products available in Canada
Further Reading
Read more on WikipediaStay Updated
Get halal finance updates, new provider alerts, and expert insights
No spam ever. Unsubscribe in one click.
Musharakah Mutanaqisah (مشاركة متناقصة) — Diminishing partnership — a widely used halal home financing structure. Diminishing partnership. A form of Musharakah where one partner's share decreases over time as the other partner buys it out.
- Diminishing partnership — a widely used halal home financing structure.
- Category: Financing Structures
- Related: Musharakah, Diminishing Partnership, Ijara, Halal Mortgage
- Compare related Shariah-compliant products on HalalWallet
How to cite this page
Preferred format (HTML):
For time-sensitive claims (rates, fees, state availability), please verify directly with the provider's official documentation and note the retrieval date.
Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-07-01
Editorial Team, HalalWallet
Independent halal finance research
Reviewed quarterly and updated for major content changes.