Determinants of the millennial generation's intention to use Sharia home mortgages

Abstract

A survey conducted by rumah.com showed that a notable number of participants, specifically 37 percent of those aged 22-29 and 36 percent of those aged 30-39, prefer Sharia mortgages to traditional ones. This research aims to explore the willingness of millennials to opt for Islamic housing loans, focusing on how their religious devotion influences this decision. The methodology of this study is quantitative, involving the distribution of questionnaires to 202 millennials. The gathered data underwent analysis using structural equation modeling (SEM-21) and SPSS 25. Findings from the study reveal that both the cost and the individual's earnings significantly encourage millennials to consider Islamic home loans, whereas their level of religious commitment does not play a crucial role. The study concludes that many millennials are inclined towards Sharia mortgages due to the fixed and extended period of repayments. Given their steady income, millennials find purchasing a home more appealing than renting, as owning a home offers a tangible asset that represents savings from their earnings.