Ijara is fast becoming the most popular method of property finance in the Muslim World. It is a more flexible scheme than Murabaha as it enables the customer to repay the mortgage early with one payment, or to make additional "overpayments" during the life of the mortgage, thus reducing the length of the mortgage. Ijara shares many characteristics with lease financing and hire-purchase arrangements. It involves a lessor (usually a financial institution) purchasing an asset and renting it to a lessee for a specific time period at an agreed rent, or receiving a share of the profits generated by the asset.

There are two main models under the Ijara structure. The first involves a longer term lease that usually ends with the transfer of ownership of the asset to the lessee (Ijara wa lqtina), similar to a modern finance lease. The second type of lease is for a shorter term and will usually end with the financial institution retaining ownership of the asset, in a manner similar to an operating lease. The rental income from this second type of lease will take into account the depreciation of the asset. Islamic mortgage technology may utilize either of the two Ijara structures. Under the Ijara structure the bank and customer jointly own a property and the customer buys out the bank's share over time.