[Islamic mortgage to buy a house]

Fatawa Question

Riba-based bank (there is no Islamic bank here) owns a house (foreclosure). I go to the bank and say that I want to buy the house and I will pay 20 % of the price. The bank says that it will invest the remaining 80 %. The bank tells me a fixed monthly installment (basically fixed interest) which I need to pay each month for the entire term and then the house will be mine. Is it permissible ? Do I need to bother how the bank is coming up with the money since it is bank’s house ? Don’t you think it's same as me going to a friend and saying that I want to buy his house paying 20 % as down payment and will pay the rest in installments for say 10 years. My friend agrees and says that I need to pay the remaining 80 % (equivalent to say $ 10000) plus $ 5000 since I am paying in installments.

Fatwa

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Publication Date

2012-04-30

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Purchasing
• Subprime mortgage

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-733442

• APA
• MLA
• AMA