Is mortgage halal

Answer 1

A mortgage is NOT halal. A Mortgage is usually referred to a loan where a security is provided, normally in the UK, the term is used when a loan is used to buy a property. There are halal alternatives, referred to by the Financial Services Authority as simply alternative 'Home Purchase Plans' (HPP). Many (wrongly), call these products halal mortgages or Islamic mortgages and has also slowly become a common term. HPPs are different in that the providers do not give a loan against a property, instead, they jointly purchase the property with you and 'let' their share to you. In a similar manner that you may pay interest on outstanding capital in a conventional mortgage, in the Home Purchase Plan you would only pay rent on the banks share of the property or 'outstanding shares' we as the buyer still want to purchase. You can contact me at One Option Finance for further information if you wish but I hope the above answers your question. Muslims believe it be a grave sin to indulge any forms of usury/interest which only creates an unequal distribution of wealth in society (a one way traffic where money only goes to the ones already rich at the expense of the poor/needier who need financial assistance). Instead, Muslims are encouraged to share in the risk of any underlying investment by acting not as lenders but investors in the property.