I live in a small town in USA. Rental properties are very limited here, those which are available are very small. I purchased a house, since I did not have full amount I took out mortgage on it. Now my monthly payment is less than what I was paying on rent. I evaluated Islamic finance options as well as the regular options but since both are based on the market interest rate I went ahead with the regular option. Please advise that taking this interest based loan is jaaiz or not. The interest payment I make to the bank, I make additional payment of the same amount to charity.
بسم الله الرحمن الرحيم
(Fatwa: 900/900/M=09/1436)
When you did not own full amount to buy house then you should wait till you arrange the full amount or try your level best to borrow interest free money from someone. It is unlawful to take interest based loan without a severe need. However, if you have taken the interest based loan then you should pay it off as soon as possible and keep on doing taubah and istighfar as well as you should avoid it in future.
Allah knows Best!
Darul Ifta,
Darul Uloom Deoband