SER (Shared Equity and Rent)

Definition of "SER (Shared Equity and Rent)"

An Islamic finance alternative to riba- based home loan as practised by MCCA Ltd, Australia. The MCCA joins a prospective home purchaser with equity. The total cost of purchase is shared. The property is registered in the name of the client as well as MCCA. The rent of the property is determined in the light of the rent rates announced by the Australian Real Estate Institute periodically. To these rates is added the average growth rate of rents over the last 15 years. The value of the property remains fixed throughout the period, with the client having the option to purchase the MCCA share at the original purchase price. Till then, he pays the MCCA rent in proportion to the latter’s share in the property.