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Buying/selling:

• you choose property, agree price, undertake survey
• bank enters into contract to buy the property from vendor
• bank sells property to you at higher price
• the higher price is paid by you in equal instalments over a fixed term, irrespective of what happens to Bank of England base rate

Leasing:

• choose property, agree price
• bank undertakes survey, buys property and sells it to you for the same price, in return for payments spread over fixed period up to 25 years
• in addition to monthly payments, you pay a sum for 'rent' - assessed annually in line with market trends
• you can overpay (as with a conventional flexible mortgage) to buy the house more rapidly

Replacing a conventional mortgage with a Shariah compliant one:

• bank buys property from you at current market value
• you agree to buy back the property at the same market price
• the bank pays off your interest-based mortgage
• you repay the bank in equal monthly instalments

 

• In a nut shell how does an Islamic mortgage work for different types of purchases?
• How can I be sure that these Islamic mortgages are really Shariah compliant?
• How do lenders make money?
• Do you charge a fee?
• Will I have to pay stamp duty?
• What about mortgage protection insurance - what happens if I lose my job and must go on state benefits?
• Can I apply for right to buy under an Islamic Mortgage?
• Why are Muslim Mortgages more expensive than traditional interest based mores?
• If I own a home, can I sell it to a person who will finance his/her purchase of the home by means of a mortgage? Should I care where the money I receive as payment for the home is coming from?
• Is it lawful buying a home in cash (no mortgage) from an owner who originally bought the home with a mortgage, and for which there is still an outstanding amount owed to the bank?
• What help does the lender offer, if something happens to me and I can't make payments?
• I want to sell my property. Will the lender benefit from any increase in the value?
• Can someone with bad credit apply for an Islamic mortgage? (copy 1)
• What happens if I die, as the property is in the Bank's name? (copy 1)
• I have heard Interest rates are used to 'benchmark' the calculation of the rental? Therefore, is this mortgage no better then an interest mortgage?
• I understand the Bank will review the Rent. I have two questions concerning this:
• What is the source of the money being lent (is it Riba based activities)?
• Do Islam Mortgages get involved in refinancing of property?
• I heard within Islam you can not have two deals in one contract which most of these mortgages do, how is it then Islamic for the lender?
• If I receive a payment from the government under the 'key worker scheme' can I use this as a deposit and get an Islamic Mortgage?

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The entire product range offered on this website is Shariah compliant. However, from time to time we will promote relevant none Halal products where no Islamic / Halal alternatives exist. Your home is at risk if you do not keep up monthly payments due under an Islamic / Halal mortgage agreement (your lease and / or diminishing ownership agreement).