The Qur'an (2:276) says: " Allah has permitted trade and forbidden usury," and in 2:278 reminds the Muslims: "O ye who believe, keep your duty to Allah and relinquish what remains (due) from interest, if you are believers."

Like any other human being, Muslims also need and desire a secure dwelling for themselves and their families. Until recently, owning a home was an unthinkable proposition for practicing Muslims because this would involve taking out a mortgage and interest (or usury) is prohibited by Islam. A mortgage is a long term loan, usually for a person or family to purchase a house over a long period (eg: 30 years).

Over the past few years, some prominent scholars have allowed Muslims living in Western countries to buy homes using a mortgage, on the premise that this is the only way available, and that rent is a long term waste of money.

These include, Yusuf Talal DeLorenzo, Yusuf Al Qaradawi, Mustafa Al Zarqa, Mish`al Al Mubarak, and others.

Yusuf Talal DeLorenzo
Sharia Advisor to Dow Jones Islamic Index, has a reply on a question about mortgages available at the Muslim-Investor web site.

Dr. Yusuf Al Qaradawi
The European Council for Fatwa and Research, chaired by Dr. Yusuf Al Qaradawi, has issued this fatwa as part of its Final Statement on 31 October 1999 for its Fourth Ordinary Session. You can view the fatwa in English here and in Arabic here.

For the sake of completeness, Dr. Qaradawi's opinion has raised some objections from other scholars, such as Dr. Mahmoud Al Tahan and Jalal Aamer.

Please note that this mortgage fatwah is not allowed in all cases or to all people. There are some restriction to consider. These include that the person engaging in mortgage does not have other assets (such as land or real estate) that could be sold and used to buy a home, that it is his main residence, and not a second mortgage (e.g. investment property). Please refer to the fatwa above for details.

Despite the fatwahs that have been passed, many Muslims still do not feel comfortable buying a home using a conventional secular mortgage. Some Housing Cooperatives have started in Canada and the USA to allow Muslims to buy houses in an interest-free way.

As a courtesy to members of the Muslim community, RICMA is providing tools* and information to get a quick comparison of both the secular and Islamic mortgage systems. Please realize that figures shown may vary from actual expenses due to additional fees, insurance, taxes, and/or unknown factors.