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Mortgage Financing vs. Riba (1)

It is a big debate in North America whether it is OK to buy a house on mortgage or not? Of course, there are different schools of thought. To some it is acceptable but others oppose it very strongly. Now, with the growing Muslim population the concept of Islamic Financing is gaining popularity here in Canada, but the problem with that is that they require minimum down payment of 30% or more and still it will always be a point of discussion i.e. which Islamic Financing is appropriate based on the source of funds etc.
I would really appreciate if you could share your thoughts on this important subject because I don’t think it is easy for a salaried person to buy a house without any sort of financing. If you keep on living in a rented/leased house it is actually no value addition in your life.


I have mentioned it on several occasions that we need to understand what riba is and how it is different from rent to come to a correct understanding on the issue. In my opinion, riba has to do with consumable, exhaustible commodities and not with the assets that are fixed. Therefore, if you are going for any financing arrangement for ultimately acquiring a house, the arrangement can be fair or unfair, but it cannot be riba-based. It doesn’t matter whether people, banks, or mortgage societies call the arrangement interest- or rent-based. A sheep doesn’t become a pig by just being called by the latter word.
Generally speaking, I find hire-purchase arrangement a very useful way of letting people ultimately acquiring homes. However, if you want to seek any clarification on the details of some of the arrangements in your part of the world, please free to write.