Halal Mortgage in Canada is now widely available when long ago it was an alien concept.
Living in a non-Muslim majority comes with its own challenges. However, as times have modernized, so have Halal practices become more and more acceptable. The halal mortgage is a prime example. it has now become more accessible and with the current state of the economy, it has also become a competitive alternative to a conventional mortgage.
Halal mortgage in Canada presents as an affordable option for people who desire home ownership instead of renting out spaces, without having the need to compromise on their belief. Before we tell you the places that make it easy to get your hands on halal mortgage, let us first enlighten you on what the basic difference is between halal and conventional mortgage.
Is Halal Mortgage Different Than Conventional Mortgage?
According to Islamic law, it is a prohibited method in commerce to lend money in order to profit from any personal or commercial investment including the financing of housing property (and others). In other words, Riba or interest of any kind on any commodity is severely prohibited.
Islam holds charity in the highest of regards. As a loan is one of the forms of charity, being an opportunity to help someone, experiencing a difficult situation, it is not allowed to make a profit from it, in any way.
The lender is allowed to only expect to be repaid the exact amount they give, without any expectation of earning any monetary benefit from it.
Similarly, Islam prohibits any kind of buying or selling over something that has no intrinsic value. Technically, a loan with interest implies one is paying for money with even more money. As money has no intrinsic value, you can’t purchase it. Allah decrees so to enhance stability in the market for the betterment and benefit of the entire community.
So, for our main question, the main difference between a halal mortgage and a conventional mortgage lies in the type of relationship at the heart of the dealing. A conventional mortgage is where a creditor gives a loan to a debtor, whereas the halal approach is completely different: it is a partnership between co-owners.
What Is A Shariah Compliant Halal Mortgage?
Under Islamic law, a home load is an intrigue-free credit, although, in a lot of cases, it is more of an unpredictable transaction. Islam prevents installments that are shadowed by interest.
For example, A bank may purchase a house for a certain amount of money but re-pitch it to some “borrower” for a benefit via amortized installments to a point where the benefit is almost as much as the bank would have made if it had expanded a general credit. There is no particular benefit in this case to the one seeking a home loan, rather it becomes a haram interaction where riba is involved.
How To Lease A Halal Mortgage?
If you seek to get a Halal mortgage, there is a way out. Ijarah is a reliable option with the following rules and regulations that require strict compliance:
- Find a house that you wish to buy and find out its real cost from the lender.
- Check the amount of the home loan with your Islamic moneylender. Your bank of choice will then buy the property.
- There are two choices to make with a loan specialist at this point:
(A). Pay back the price of the property in regularly scheduled payments that are pre-settles, usually not more than 25 years.
(B). You will pay a set amount of lease every month (this might give the loan specialist an upper hand.)
- When the amount has been paid in full to the loan specialist, the ownership of the property is exchanged from the moneylender to you.
Now that we have established the basics of getting a halal mortgage under Islamic rules, let’s see what are the top 10 places that offer halal mortgage in Canada.
Top 10 Places To Get Halal Mortgage From
- Halal Home Financing: Manzil.ca
- Canada Islamic Mortgage Islamic Loan: shariah Banking.com
- Islamic Finance in Canada: ayafinancial.com
- Halal Mortgage: eqraz.com
- Islamic Banking: habibcanadian.com
- Halal Mortgage Of Canada Ltd. : dnb.com
- Mortgages: woodgundyadvisors.cibc.com
- Islamic Financing: ijaracdc.com
- Islamic Home Finance Service: guidanceresidential.com
We hope our information is helpful for you in finding a peaceful haven for you and your loved ones, the halal way. Have anything to add? Let us know.