Is it permitted to take an Islamic Mortgage?



Islamic Text

It depends on the details of the Islamic mortgage contract.

قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

They claim, trading is similar to usury, but Allah has permitted trade and prohibited usury. (Surah al-Baqarah, 275).

There should be no blanket Fatwa given for Islamic mortgages. Neither one saying they are always Haram nor they are always Halal. The contract needs to be looked at, analysed and understood. If there is nothing Haram in the contract then it is permitted otherwise it is prohibited.

The Ayah above makes it clear that there is a difference between interest and trading, and it is the way of the Kufar to consider them the same. Therefore, Muslim scholars are obliged to scrutinise contracts prior to issuing Fatwa, especially when the company providing the contract is attempting to avoid interest and provide a contract that is Halal. One must check to see if they have been successful in this attempt or not. Only after such scrutiny should a Fatwa be issued.

{وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا} [البقرة: 275] فَعَيْنُ النَّصِّ يُوجِبُ إبَاحَةَ الْبَيْعِ وَحُرْمَةَ الرِّبَا وَالتَّفْرِقَةَ (كشف الأسرار شرح أصول البزدوي)

But Allah has permitted trade and prohibited usury. (al-Baqarah, 275). This clear text dictates the permissibility of trade, the prohibition of usuary and a difference between the two. (Imam Ala al-Deen al-Bukhari, Kashf al-Asrar).

And Allah (Most High) Knows best.

– Answered by Shaykh Noorud-deen (01.03.2021)

See also:

Is it permitted to take a mortgage?