Alternative to interest bearing loans

Answered according to Hanafi Fiqh by

I want to buy a house hear in Canada where I live for me and my family  and I do not want any interest.  I know mortgage questions are asked multiple times but I did not find an answer to my question.  there is a businessman who offered to buy the house that I wants and he will buy it by taking a loan and then  I buy it from   him over a period of time ( rent to own).    Is this permissible or not.  He will buy it and own the house according him.  I have to put down payment and he will let me know how much does it cause at the end roughly will add about 8 percent per year to the cost minus the down payment.


In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

It is pleasing to note that you wish to stay away from interest.

According to the proposal presented by you, a businessman will take a loan and purchase the house and resell it to you at a profit.

It is obvious that the businessman will be taking an interest bearing loan to facilitate for you. That too is incorrect as an interest bearing loan will be conducted to facilitate for you. That will defeat your purpose of abstaining from interest.

However, if the businessman purchases the house outright and sells it to you at a profit with a deferred payment, that is permissible. This financing procedure is called Muraabaha.

For further details on Muraabaha, you may refer to this link.

(Read from page 65)

And Allah Ta’āla Knows Best

Muhammed Al-Ameen Bin Moulana Ismail Akoo

Student Darul Iftaa

Newcastle; KZN, South Africa 

Checked and Approved by,
Mufti Ebrahim Desai.