[Q 239] Islamic Ruling on Mortgages in Non-Muslim countries

Question

What do the scholars say about the issue of taking a mortgage from a bank here in England to purchase a property, where I pay £700 monthly, of which, for instance, £50 is as interest and the rest as repayment of the loan? Is it permissible for us to take a loan from the bank in this manner?

بِسْمِ اللہِ الرَّحْمٰنِ الرَّحِیْمِ

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

Answer

In the scenario you described, purchasing property in cash in non-Muslim countries like Europe and America is undoubtedly challenging. Islam has declared interest (Riba) haram, and no Muslim can give or take interest from another Muslim. However, the situation of interest transactions between a Harbi Kafir and a Muslim is different.

It is stated in Hidayah:

“لَا رِبوٰا بَیْنَ الْمُسْلِمِ وَالْحَرْبِی”

translation: There is no interest between a Muslim and a Harbi Kafir.

Therefore, jurists have allowed benefiting from such contracts that involve interest with a Harbi Kafir, like giving a loan to a non-Muslim and accepting excess in return, considering it permissible profit but not with the intention of interest.

It should be noted that jurists do not generally allow the opposite, i.e., it is not permissible for a Muslim to take a loan from a non-Muslim and pay interest on it.

However, considering the difficulty and hardship in purchasing a personal home in non-Muslim countries, taking a loan through a mortgage due to severe necessity is permissible, and many contemporary jurists have allowed this. For more details, see Fatawa Bareilly, page 33.

It should be emphasized that this permission is only granted due to severe necessity, and thus, it is not permissible to engage in business buying and selling additional houses on mortgage apart from one’s personal home.

Fatwa by: Darul-Ifta-Ahlesunnat