Are Islamic Bank Mortgages & Home Loan Plans Permissible

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Shaykh Abu Eesa discusses

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Are the Islamic mortgages or home purchase plans are offered by Islamic banks permissible?

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There's a real dearth I mean, a real problem in a lot of the non Muslim countries. The Muslim countries are doing better on this now, but certainly US, Canada, they're struggling to be able to put forward these kind of institutions that can allow house purchase plans for Muslims. The UK is doing a lot better in that sense. legislation was done back in the court in brown days, when he was I think the the Chancellor of the Exchequer then and

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removed certain kind of

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problems and barriers that would allow normal banks to actually see a bigger profit opportunity to offer this product to Muslims. There's a huge discussion about it, some people say that you've just made the Riba halal and this and that, actually, that's a very narrow minded approach. I consider, as of right now, the product that some banks offer, or one particular bank offers, which is called the the standard house purchase plan, which is based upon what's called a diminishing musharaka debitum. League,

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a diminishing Partnership, which effectively has a bank and a person, you and you both go into a purchase of a house, you choose the house, they say to you, you got 10 20% to put forward towards the house, you say yes, you save up for it, it's a lot of money, of course, but you got to get that money from friends and thing, whatever, 2030, grand, 40, grand, maybe 60 5060, grand, whatever it is, you get that, and then the bank will go in the rest of the 90%, or the 80%. So you're now partners in this house, that bank itself really, you know, I want you to understand that banks make billions of money without ever having to take risk on the horrible things like cars properties and

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buying things. The government covers them, they make money just off the fact that they have money and they make money. That's literally you know, they are, they are guaranteed by the government to make money. So the last thing they want to do is to actually buy things. So when they do this is a very positive sign for the permissibility of these kind of contracts. And then once you've bought that they're not really interested in the house, but they know that you are and so you want to live in that house and use it. And so you are going to be in 80% of their house. So they'll say okay, well 20% is yours and you can live in that part. But the rest of it, we're going to charge you a

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rent, and a rent which is proportional to the amount that we own. And at the same time while you're paying rent that we will decide according to x rate, and it doesn't matter what that rate is, but they will choose it and you will accept it. And then also give you opportunities to make payments back to pay back the actual sum to buy out your partner. And some of them are even generous enough to offer you the purchase price to be fixed at the time of purchasing as opposed to saying the price of what it would be in 30 years that the time you take to pay 30 years where the price of the house or that will be doubled, and you'd be really, really stuck because it'll be very difficult for you

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to pay. So anyway, this is what's called a diminishing musharaka diminishing Partnership, which then ends up with you owning it. I'm only going over very briefly, I believe this model, especially with qualified Sharia scholars are not some lackeys and some charlatans, only that you might find in some dodgy organizations, but recognize it a lemma. Okay. And the scholars know the scholars, you can ask them and we know the supervisory board, I believe it to be permissible. I believe that a person can use one of these to purchase a house and by the way, I just want to say to end that we should also not be you know, polling decided that we must own you know, a house and renting is completely

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impossible. This is not go that way as well. But do I believe it to be permissible? Yes, I do. Hey, thank you for watching and subscribe so you can continue to get the rest of the videos. I don't know what somewhere over here, there, whatever whatnot, is beautiful. This, this series of videos face IQ, and we need your support. And that's by watching it by sharing it and then by donating towards us. We can continue to make more videos that deal with more of your issues. Does that Kamala Harris allamani Rahmatullah