Can you tell me whether it is permissible to use interest (e.g. earned from a fixed deposit) to pay off the interest on one’s mortgage bond?
Answer
Interest is the filth of one’s wealth and is Haraam. Those who indulge in interest have been severely warned in the Qur’aan. As a Muslim, one should develop the repugnance for interest and everything associated with it. A Muslim may never actively earn interest. However, if interest comes into one’s possession as a consequence of other transactions, this interest should be surrendered to the payer of the interest. If this cannot be achieved, it should be given to the poor and needy. (Contemporary Fataawa pg.243; Idara)
and Allah Ta’ala Knows Best
Mufti Ebrahim Desai