Islamic Mortgages
Islamic mortgages are Sharia-compliant products. Currentlyin the UK Islamic Motgages are based on Ijara and Murabha methods. Under an Ijara finance plan, the customer chooses the property and agrees a price with the vendor in the normal way. The property is then purchased by the financier, who takes its legal title. The property is then sold onto the customer at the original price, with payment spread over an agreed period of time. During that time, the customer also pays the financier rent for the use of the property. Once the agreed period of time has elapsed, ownership of the property is transferred to the customer. Under a Murabaha plan, the customer chooses the property and agrees the price with the vendor in the normal way. Similarly, the financier then purchases the property from the vendor, but on the day of completion it is immediately sold on to the customer at a higher price. The higher price is determined by the value of the property, and the number of years that the financier allows the purchase price to be paid over and the amount of the first payment. The customer then makes regular monthly payments until the purchase price is paid.
Find cheap mortgage rates
