Home Purchase Plan vs Conventional mortgage? Example

Q: My question is in regards to Home Purchase Plan via Conventional mortgage.
I have had a HPP from an Islamic Bank (Ar Rayyan) now for 4 years. I have noticed during these 4 years that the rent/purchase ratio of the monthly statements fluctuate drastically from month to month and as an average – every year I’m making a total acquisition payment of the property of about £5-6,000 a year Vs £7,500-8,500 in rental payments.
On comparison with conventional mortgages I may be able to get better terms and increase my acquisition payment overall per year however instead of rent, interest would be paid.
Is it permissable to change in order to seek a faster way to complete purchase and come out of debt?
This is my only property and is our family home.


A: الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب

It is not permissible to take out a conventional mortgage and pay interest with a view to making increased acquisition payments. Whilst this in no way an endorsement of Al Rayan’s pricing structure, to move from a home purchase plan that has the endorsement from a group of sharia scholars to one that is without doubt unlawful in Islam cannot be deemed to be permitted. Instead, you may wish to speak to Al Rayan to see if it is possible to have reduced rental costs or you may, if possible make additional payments to increase your equity and this should bring down the rental costs.

And Allah knows best.
Mufti Mohammed Zubair Butt
Chair Al-Qalam Sharia Scholars Panel

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