Is a Partial Mortgage Permissible?
Answered by Shaykh Irshaad Sedick
Question
I purchased a house in Canada and covered most of the cost. However, I secured a mortgage equivalent to 1/6th of the property’s value and funded the remaining 5/6th by myself. Subsequently, I rented out the house. As a single mother, I reside in Egypt and utilize the rental income to pay for my son’s school expenses. Buying the house is to have it available when my son attends university in Canada, Insha’Allah. Is the money I’m paying for the mortgage considered riba? I obtained the mortgage this year.
If I were to sell the house and use the proceeds to invest with my cousin in a construction project in Canada, with a project duration of 1.5 years and a profit share based on his previous projects – a portion at the end of 1.5 years and another portion as monthly payments throughout the duration, given my reliance on this income, is this permissible?
Answer
In the Name of Allah, the Most Merciful and Compassionate. May Allah alleviate our difficulties and guide us to what pleases Him. Amin.
Regarding the Mortgage:
Islamic finance principles generally prohibit the payment or receipt of riba (usury or interest). In your case, assessing whether the mortgage you obtained involves interest is essential. The fact that you’ve mentioned taking a mortgage indicates the potential involvement of interest (as with most conventional mortgages), and paying or receiving interest is not permissible in Islam. Consult with a knowledgeable Islamic scholar who can review the specific terms of your mortgage to provide a definitive ruling.
Regarding the Investment in the Construction Project:
Islamic finance principles emphasize ethical and Sharia-compliant investments. Investing in a construction project itself is not inherently impermissible, but the terms and nature of the investment must adhere to Islamic principles. Profits from ventures involving interest, uncertainty (gharar), or unethical activities may be considered impermissible. The specifics must be examined to determine this, and Allah knows best.
To determine the permissibility of your investment, it is advisable to consult with an Islamic scholar who can review the details of the investment, including the profit-sharing arrangement and the nature of the construction project. They can guide whether the investment aligns with Islamic financial principles.
It’s crucial to seek personalized guidance from a qualified Islamic scholar who is well-versed in Islamic finance and jurisprudence to ensure that your financial decisions comply with Islamic principles.
I pray this is of benefit and that Allah guides us all.
Shaykh Irshaad Sedick
Shaykh Faraz Rabbani notes:
A proper standard is that the finance company have [1] a Shariah board of recognized scholars of established expertise in Islamic finance (ideally three or more), [2] who have directly reviewed and approved both the contracts and operations of the company; and [3] that this be done in accordance with established standards for Islamic finance—ideally, those of AAOIFI.
If not according to the above, one should check whether the scholar[s] who approve are, in fact, experts in the area of Islamic finance—and that they have, in fact, approved the contracts and operations through actual review.
Checked and Approved by Shaykh Faraz Rabbani
Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar Shaykh Taha Karaan.
Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki, among others.
He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. For the last five years till present, he has served as the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.
Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and has completed his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.
