Financing house purchase in the west : buying on interest may cost less than renting

Fatawa Question

Assalamu Alaikum I am a professional working in London. The situation with regards to housing is that it is more expensive to rent than to make mortgage payments. Many brothers have come to me saying there are Fatwas which allow you to take mortgage. I have still not taken one though. There is now the Kuwait bank in London which claims to offer a Halal method of purchasing your own home,-do you know about this ? In what exact circumstances is one permitted to take a mortgage and what are the conditions ? Until recently I viewed Muslims taking mortgages to save on rent as having love for the Duniya. However, one brother said to me that he will not always be young and will need a place to live in his old age. (Tying the camel ?) If the method of financing your home purchase is Halal from the Kuwait bank for example, then would you recommend renting or buying ? What are the conditions ? And if you buy a home you have a debt, can you go for Hajj ? In the UK you have to take out compulsory life insurance cover which pays your mortgage if you die. Is this allowable or is it doing one Haram to cover another ?

Fatwa

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Publication Date

2001-08-02

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Rent
• Subprime mortgage

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-725406

• APA
• MLA
• AMA