Hejaz vs MCCA: Which Provider Is Right for You?

Two of the most recognised names in Australian Islamic home finance are MCCA (Muslim Community Co-operative Australia) and Hejaz Financial Services. Both offer Sharia-compliant home finance, but they differ significantly in structure, history, and product features. Here's a detailed comparison to help you decide.

At a Glance

Sources: mcca.com.au, hejazfs.com.au

Understanding the Different Structures

MCCA: Ijarah Muntahia Bittamleek (Lease-to-Own)

MCCA uses an Ijarah Muntahia Bittamleek structure — a lease arrangement that ends in ownership. Here's how it works:

• You identify a property as Wakeel (agent) of MCCA
• MCCA/the Funder purchases the property
• You lease the property with the right to occupy and eventually own
• Periodic payments are considered lease rental
• You can purchase outright at any time by paying the outstanding finance amount
• On receipt of the final payment, ownership transfers to you

MCCA's Sharia advisors classify Ijarah as a contract of exchange (right to use asset for rent payment), not a participation contract. This means MCCA is not entitled to share in profits from property sale during the term, nor required to share in losses (MCCA Finance Products FAQ).

Hejaz: Musharakah (Diminishing Partnership)

Hejaz uses a Musharakah (partnership) structure, where you and Hejaz co-own the property:

• You contribute a deposit (your ownership share)
• Hejaz funds the remainder (their ownership share)
• You pay rent on Hejaz's share while gradually buying it out
• As your ownership increases, rent decreases
• At term end, you own 100% of the property

Hejaz offers multiple product tiers including Gold, Flexible, Essential, and SMSF Home Finance (hejazfs.com.au).

Sharia Certification: How Do They Compare?

Both providers engage independent Sharia scholars to certify their products, which is standard practice in Australia where there is no single national Islamic finance certification body.

MCCA products are certified by independent Sharia Advisors. MCCA also promotes the scholarly work of Mufti Taqi Usmani — one of the world's foremost authorities on Islamic finance — through their knowledge hub (MCCA Knowledge Hub). Their educational content includes talks by Almir Colan, consultant lecturer in Islamic Capital Markets at La Trobe University (MCCA Principles of Islamic Finance).

Hejaz provides Sharia-compliant products under AFSL 517686 (Hejaz Financial Advisers Pty Ltd). Specific Sharia board details are available in their Product Disclosure Statement.

Product Features Compared

Rates and Pricing

MCCA quotes rates on application, tailored to individual circumstances, and offers both variable and fixed options. Hejaz similarly structures pricing based on product tier. Both providers' effective rates are typically 0.3–0.8% higher than comparable conventional mortgages, reflecting the structural complexity and smaller market scale of Islamic finance (Mortgagefy analysis).

Flexibility

• MCCA: No early exit penalties, variable or fixed rates, can refinance from any bank, client name on title
• Hejaz: Multiple product tiers (Gold, Flexible, Essential) offering different feature sets and price points

Eligibility

Both providers require standard income verification and serviceability assessment. Neither requires applicants to be Muslim — Islamic finance products are available to anyone. MCCA requires a minimum 10% deposit and accepts non-resident applicants under specific criteria (net surplus assets > AUD 500,000) (MCCA FAQ).

Regulatory Protection

Both providers are regulated by ASIC and must comply with the National Consumer Credit Protection Act, including responsible lending obligations. Both hold the required AFS licences or authorisations. However, neither is an ADI, meaning deposits are not covered by the government's Financial Claims Scheme (ASIC Moneysmart).

Which Should You Choose?