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| From: Hamsterwheel |
It’s just a technicality to abide by Muzza rules, interest will be the same amount. Same as any Muzza mortgage
An Islamic mortgage (or halal mortgage) is a Sharia-compliant home purchase plan that avoids paying or charging interest (riba), which is forbidden under Islamic law.
How It Works
Instead of loaning money with interest, the bank or financial provider uses alternative transaction models: • Musharaka (Diminishing Partnership): You and the bank jointly buy the property. You pay rent on the bank's share while gradually buying out their stake through monthly payments until you own 100% of the home. • Murabaha (Cost-Plus Financing): The bank buys the property and sells it to you at a higher, fixed price agreed upon upfront. You pay this off in monthly installments. The profit margin is fixed and does not compound like interest. • Ijara (Lease-to-Own): The bank buys the property and leases it to you over an agreed term, with a portion of your payments going toward purchasing the property.
Common Structures & Providers
• UK Options: Providers such as Gatehouse Bank, StrideUp, and community-based models like Pfida offer alternative home finance products regulated by the Financial Conduct Authority (FCA). • Deposits: Typically require a deposit ranging from 5% to 35%, depending on the provider and product.
Perspectives and Debate
Opinions on these products vary. Proponents argue that shared ownership and pre-agreed markups are legitimate commercial transactions rather than interest. Conversely, as discussed on Reddit, some critics argue that the rent or profit rates often mirror conventional interest benchmarks, making the final cost comparable to or higher than a standard loan
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| Current Thread | Author | Time | | Free Thinking Doggie | 18:12:22 | | Denc 🗡 | 18:55:32 | | Hamsterwheel | 18:20:28 | | Free Thinking Doggie | 18:33:54 | | Hamsterwheel | 19:06:58 | | Free Thinking Doggie | 19:18:30 | | Denc 🗡 | 19:30:47 | | Hamsterwheel | 19:33:56 | | Denc 🗡 | 20:37:45 | | Hamsterwheel | 20:42:13 | | Free Thinking Doggie | 18:14:27 | | Denc 🗡 | 20:38:45 |
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