Terms and definitions


Saudi Arabian Monetary Authority


A natural or juristic person to whom finance services are offered.


Repayment of an existing financing from the proceeds of a new financing granted to the borrower.

Real Estate Finance

Extending credit to a borrower for the purpose of owning a dwelling by paying the finance amount and cost in affordable installments.

Consumer financing

A financing granted to a borrower for purposes unconnected with the Borrower’s commercial or professional activity, generally including personal Financing, car Financing, Home Improvement Financing, and similar products as approved by SAMA. Real estate financing, leasing, and finance for stocks trading are excluded.

Real Estate Finance Entity

Commercial banks and finance companies licensed to engage in real estate finance activities.

Real Estate Finance Company

A joint stock company licensed to engage in real estate finance activities.

Real Estate Refinance Company

A joint stock company licensed to engage in real estate refinance activities.


Banks and finance companies licensed by SAMA.

Finance Agreement

An agreement whereby credit is granted for activities allowed to be funded in accordance with the financing rules and regulations.

Finance Amount

The maximum or total amounts available to the borrower under a finance contract.


An Amount of Financing drawn by the Borrower under a Financing Contract.


The total amount payable by the borrower distributed over the term of the finance contract, excluding non-recurring expenditures, expenses and costs such as charges, commissions and administrative fees.

Annual Percentage Rate (APR)

The deduction rate where the current value of all installments and other payments payable by the consumer.

Term Cost

The term cost due and payable by the Borrower under the financing contract; this must be expressed as a fixed annual percentage of the amount of financing obtained by the borrower.

Total Finance Cost

Costs to be paid by the borrower under a finance contract other than the finance amount in accordance with the provisions of the finance contract. Such costs include term cost, charges, commissions, administrative fees, insurance, and any expenses required to obtain finance.

Total Amount Payable by the Borrower

The finance amount in addition to the total finance cost.


Any breach of the terms and conditions of the Financing Contract and the nonpayment by a Borrower of their monthly installment for 90 Calendar Days from its due date.

Housing Subsidy

A financial or credit subsidy provided by the government, housing societies, or the like to make housing affordable.

Real Estate Housing Finance Subsidized Product

A product subsidized by a housing subsidy provider through a real estate finance entity.


Real estate finance sector.

Real Estate Finance Contract

A deferred payment contract extended to a borrower to own a dwelling.

Gross Salary

Basic monthly salary (less GOSI and pensions contributions) plus all fixed allowances paid to Borrower by the employer on a monthly basis.

Guarantee Agreement

An ancillary agreement concluded by a Guarantor and guaranteeing or promising to guarantee the fulfillment of any form of Financing granted to a Borrower.


A natural person who guarantees or promises to guarantee the fulfillment of any Financing granted to a Borrower.

Optional Feature

Features and services which are not part of the standard features or services of the Financing Contract product, requiring payment of additional fees by the Borrower.