A conventional interest-based mortgage involves riba, which is forbidden, so most scholars say to avoid it. Islamic home finance (such as ijara or diminishing musharaka) is available in the UK and many Western countries. A minority view — including a 1999 opinion of the European Council for Fatwa and Research — permits a conventional mortgage for a family home in cases of real need.

Is a Mortgage Halal? Conventional vs Islamic Mortgages

Also asked as: “Is a mortgage haram?” · “Can Muslims get a mortgage?” · “Is it haram to buy a house with a mortgage?”

Why conventional mortgages are a problem

A standard mortgage is a loan with interest, which is riba. The Qur'an prohibits riba strongly, and paying it is included in the prohibition.

Islamic home finance

Diminishing musharaka: you and the provider buy the house together; you pay rent on their share and gradually buy it out.
Ijara: the provider buys the house and leases it to you, with ownership transferring at the end.
Murabaha: the provider buys the house and sells it to you at a fixed, higher price paid in instalments.

Several UK providers offer these products. They are often more expensive, which is why some people look at alternatives.

The minority view

The European Council for Fatwa and Research permitted a conventional mortgage for Muslims in Europe buying a first family home where no Islamic option is available and renting causes hardship. Many other scholars disagree. If you rely on this view, it is best to speak to a scholar about your situation.

Sources and further reading

European Council for Fatwa and Research — resolution on mortgages (1999)

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