Contact UsSite Map


Debate on Islamic Finance by Riazat Butt

Guardian Unlimited looks at Islamic Finance with Junaid Bhatti from the Islamic Bank of Britain, Ed Balls Economic Secretary to HM Treasury, Tony Levene from the Guardian, and Sharia-sceptic Dr Mohammed Saleem.

> Click here to download the debate now.

Guardian Unlimited © Guardian News and Media Limited 2007

How do Islamic Mortgages compare to traditional mortgages?

Sharia-compliant products currently available in the UK 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.


Islamic Mortgages Info

Islamic Finance podcast

Mohammed Amin of Price Waterhouse Coopers, has recorded a pod cast on Islamic Finance; Mohamed gave a talk in London last year regarding its taxation (August 2006). To share this with readers, he has recorded the presentation in audio format.

> Click here to download this audio broadcast.


Important:  is not responsible for the content of external websites

Copyright © 2011 Islamic Please read our Terms and Conditions
The entire product range offered on this website is Shariah compliant. However, from time to time we will promote relevant none Halal products where no Islamic / Halal alternatives exist. Your home is at risk if you do not keep up monthly payments due under an Islamic / Halal mortgage agreement (your lease and / or diminishing ownership agreement).