Is It Permissible To Purchase a Home With a Mortgage?

Question: Is it permissible to purchase a home with a mortgage?

Answer:

In the Name of Allah, the Most Merciful and Compassionate,

It is not permissible to take a mortgage for the sake of buying a home. However, many organizations have come forth with a permissible alternative to the conventional mortgage.

Unfortunately, there are some organizations that claim to be permissible but are not.

Advice

Firstly, you should seek out an Islamic compliant organization that (a) has a Shari’a board of recognized scholars of established expertise in Islamic finance (ideally three or more) and (b) who have directly reviewed and approved both the contracts and operations of the company; and (c) that this is done in accordance with established standards for Islamic finance—ideally, those of AAOIFI.

If you do not find any of the above, then you must understand that buying a house is not a necessity, whereas obeying Allah Most High is. Likewise, the claim that purchasing a home is better than renting has been debated by many recently.

Another alternative that I have seen some of my teachers do is to take a personal interest-free loan from friends or family members and purchase the house in full. Thereafter, you will make payments to everyone you owe over a period of time. By pooling money together many families and friends can help each other acquire real-estate.

If you do not find the above alternative plausible in your situation, you must bear patiently and understand that this life is fleeting and the Next Life is eternal. Also, be certain that just as Allah Most High is providing for you, He will provide for your children whether you leave them a house or not.

I hope this helps,
Allah knows best.
[Shaykh] Yusuf Weltch

Checked and Approved by Shaykh Faraz Rabbani

Shaykh Yusuf Weltch is a graduate from Tarim; a student of Habib Umar and other luminaries; and authorized teachers of the Qur’an and the Islamic sciences