Is it permissible to take an offset mortgage ?
Fatawa Question
Many conventional banks have products called ‘Offset’ mortgages. These are mortgages whereby : If I have a mortgage of 50 K and savings of 50 K the savings offsets the interest on the remaining mortgage value. So in the above case 50 K mortgage, 50 K savings means zero interest. Hence, is it permitted to take a conventional mortgage whereby there is no interest (due to the interest offset against savings ?) If the savings are touched, e.g. If 10 K out of 5 0K is taken out, and there is a mortgage of 50 K, the interest will be applied on the 10 K. However, if I am sure I will have the money for the duration of the mortgage in the account-is this permitted as paying or dealing with Riba is avoided. (Similar to a credit card whereby if I don’t pay my balance end of the month I incur interest) The scenario is that I am in the process of buying a flat for 30 K with the local authority. I have this much saving as well, thus rather than use my saving I can pay no interest and simply pay the capital repayment with no Riba.
Fatwa
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Publisher
al-Qalam Shariah Scholar Panel
Publication Date
2014-07-16
Country of Publication
United Kingdom
Main Subjects
Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies
Topics
No. of Pages
1
Data Type
Fatawa
Language
English
Record ID
BIM-726994
American Psychological Association (APA)
al-Qalam Shariah Scholar Panel (Manchester, England). 2014-07-16. Is it permissible to take an offset mortgage ?. . Manchester England : al-Qalam Shariah Scholar Panel.
https://search.emarefa.net/detail/BIM-726994
Modern Language Association (MLA)
al-Qalam Shariah Scholar Panel (Manchester, England). Is it permissible to take an offset mortgage ?. Manchester England : al-Qalam Shariah Scholar Panel. 2014-07-16.
https://search.emarefa.net/detail/BIM-726994
American Medical Association (AMA)
al-Qalam Shariah Scholar Panel (Manchester, England). 2014-07-16. Is it permissible to take an offset mortgage ?. Manchester England : al-Qalam Shariah Scholar Panel.
https://search.emarefa.net/detail/BIM-726994