What is Islamic Mortgage or Halal Mortgage? Meaning, Definition, and Example

An Islamic mortgage, also known as a halal mortgage, is a home financing solution that complies with Sharia law mortgage principles. Unlike conventional mortgages,

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which involve interest-based transactions, halal mortgages are structured in a way that avoids riba (interest), which is prohibited in Islam. Instead, these mortgages are based on ethical financing methods such as Murabaha (cost-plus financing) or Ijara (leasing), where the lender and borrower share ownership and profits.

Halal mortgages provide a Sharia-compliant alternative for Muslims who wish to purchase property without violating religious principles.

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