GJAT | DECEMBER 2013 | VOL 3 ISSUE 2 | 23 ISSN : 2232-0474 | E-ISSN : 2232-0482 www.gjat.my This journal is a member of and subscribes to the principles of the Committee on Publication Ethics (COPE) Abstract Islamic banking in Malaysia has evolved rapidly since its frst invention in 1983. Throughout 30 years of development, various products have been developed to fulfll the demands of the society both Muslim and Non-Muslim. Positive support and constructive criticisms have fourished the industry and made the product innovation to be enhanced accordingly. With regards to the products, retail fnancing is observed to be so dearer to the society compared to other form of fnancing like trade and corporate. Home fnancing is regarded as the most infuential one since it normally affects long term commitment of the customer. Thus, this paper aims at analysing pricing issue of home fnancing products offered in Malaysia specifcally BBA and MMP. The study uses content analysis method with intense and analytical readings of the previous texts and literatures on issues observed in the two products. The issue will then be comparatively reviewed using Maqasid-based appraisals. Keywords: Islamic Banking; Home Financing; Bay’ Bithaman Ajil (BBA); Musharakah Mutanaqisah (MMP); Maqasid al-Shari’ah Introduction The emergence of Islamic banking for the last 30 years has brought the industry into several stages of development. Islamic banking and fnance as modern corporate entity in the world history has emerged when Mit Ghamr Savings Bank was established in 1960’s with basic banking facilities such as deposit, investment, equity participation and fnancing (Asyraf Wajdi, 2011; Ghani, 1999; Haron & Azmi, 2009; Iqbal & Molyneux, 2005; Khir et al., 2008). This purely Shari’ah-based institution however collapsed due to lack of support by the government in 1968 (Asyraf Wajdi, 2011). The world since then has evidently shown a great expansion of Islamic bank from its frst emergence in 1960’s to a boom in the 1970’s, 80’s and towards the 20 th Century with thousands of Islamic banks established with quite a number of participation from regulatory bodies and organizations like Islamic Development Bank (IDB), Accounting and Auditing Organization for Islamic Financial Institution (AAOFI), International Islamic Financial Market and Islamic Financial Services Home Financing Pricing Issues in the Bay’ Bithaman Ajil (BBA) and Musharakah Mutanaqisah (MMP) Syahidawati Shahwan (Corresponding author) Faculty of Economics and Muamalat (FEM), Islamic Finance and Wealth Management Institute (IFWMI), Universiti Sains Islam Malaysia (USIM), 71800 Nilai, Negeri Sembilan, Malaysia Tel: +606-7986318 E-mail: syahidawati@gmail.com Mustafa Omar Mohammad International Institute of Islamic Banking and Finance (IIiBF), Kuliyyah of Economics and Management Sciences (KENMS), International Islamic University Malaysia (IIUM), 50728 Kuala Lumpur, Malaysia Tel: +603-61964850 E-mail: mustafa@iium.edu.my Zaharuddin Abdul Rahman Kulliyyah of Economics and Management Sciences (KENMS), International Islamic University Malaysia (IIUM), 50728 Kuala Lumpur, Malaysia Tel: +603-61964850 E-mail: uzaharuddin@iium.edu.my