IslamQA

Home Loan

Answered according to Hanafi Fiqh by Darulifta-Deoband.com
In western non-Muslim countries, rents are going to be very expensive for families with children. Due to wood construction, children voices are very painful for neighbors in basements, apartment and condominium buildings. Due to higher fuel price, cold weather and shortage of time, Muslims like to live near the mosques, transit system, halal food stores and Islamic schools. As soon as family size increases land lords and rental management services feels uncomfortable to give us a property for rent.
In this situation, is it allowable for us to purchase only one small house on a fixed mortgage interest rate basis? On a fixed rate mortgage, bank gives the mortgage on a 2.6% to 3.25% fixed interest rate and we have to pay off installments (mortgage) in a 20-25 years. As per law, we have to purchase home and car insurance too. We tried our best to avoid from interest and insurance but due to laws, we have to purchase car and home insurance.

بسم الله الرحمن الرحيم

(Fatwa: 810/651/B=1434)

If it is very hard to buy or build home in non-Muslim countries and it is also difficult to get it on rent then in such compulsion it is allowable to buy interest based mortgage house. You should buy the house with the actual price of house along with interest up to last instalment whatsoever it may be and later you should keep on paying the total price in instalments. In this case one may save himself from interest as well as may buy one’s personal home.

Allah knows Best!

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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