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wiwarin_mir
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#1
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did you know that HSBC has started giving out 'muslim friendly' mortgages, which have no interest added.
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Juwel
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They started that ages ago. It's a great idea for the keen Muslim, and luckily for HSBC no other bank is yet quick enough to operate it.
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blissy
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muslims have always got around the "no usury" rule. It's always just a facade so they don't feel bad. "Muslim-friendly" or not, they are still breaking their own rules
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wiwarin_mir
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(Original post by blissy)
muslims have always got around the "no usury" rule. It's always just a facade so they don't feel bad. "Muslim-friendly" or not, they are still breaking their own rules
I think I will try and get a mortgage or bank account which is 'muslim friendly', just to see if I can get one. If I cannot, I shall complain, saying I am being descriminated against.
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Juwel
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(Original post by blissy)
muslims have always got around the "no usury" rule. It's always just a facade so they don't feel bad. "Muslim-friendly" or not, they are still breaking their own rules
Actually all this is, is that HSBC buys the property, and rents it to the "mortgagee" for such a period of time until the value of the house is paid off. It's a clever way to avoid interest but the bank still gets something.
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sashh
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I don't think you avoid interest, you just pay it as rent. BTW if you but this way you pay stamp duty twice. Once when the bank buys the property and one when you buy it from them.

HSBC may be the only high st bank, but others do this kind of mortgage.
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Howard
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(Original post by wiwarin_mir)
did you know that HSBC has started giving out 'muslim friendly' mortgages, which have no interest added.
What is a muslim friendly mortgage? How does it differ from a regular (presumably unfriendly) mortgage?
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EconLou
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(Original post by Howard)
What is a muslim friendly mortgage? How does it differ from a regular (presumably unfriendly) mortgage?
Ok well basically the bank buys the house for you and you save the money for the house with that bank. When you can afford the house (say in 20years time) you give the money to the bank, but there is interest because the bank sells the house to you at a higher price, so there is not really any advantage interest wise to buying a house. It gets around the rule that no muslim must pay/charge interest. All i would like to know is, is the price that the Musilim buys the house at agreed when the morgage is agreed with the bank because inflation rates/property prices in that area could change rapidly.
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EconLou
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(Original post by sashh)
I don't think you avoid interest, you just pay it as rent. BTW if you but this way you pay stamp duty twice. Once when the bank buys the property and one when you buy it from them.

HSBC may be the only high st bank, but others do this kind of mortgage.
The law has/is being changed so stanp duty is only paid when the bank buys the house. No sure of the ins and out but have read about it.
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AT82
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(Original post by Louise_1988)
Ok well basically the bank buys the house for you and you save the money for the house with that bank. When you can afford the house (say in 20years time) you give the money to the bank, but there is interest because the bank sells the house to you at a higher price, so there is not really any advantage interest wise to buying a house. It gets around the rule that no muslim must pay/charge interest. All i would like to know is, is the price that the Musilim buys the house at agreed when the morgage is agreed with the bank because inflation rates/property prices in that area could change rapidly.
Why does this only apply to muslims and not christians?
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Sanctus
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I wonder what the costs would be for having to insure a "muslim" house against being blown up by the Israeli army...
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Howard
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(Original post by Louise_1988)
Ok well basically the bank buys the house for you and you save the money for the house with that bank. When you can afford the house (say in 20years time) you give the money to the bank, but there is interest because the bank sells the house to you at a higher price, so there is not really any advantage interest wise to buying a house. It gets around the rule that no muslim must pay/charge interest. All i would like to know is, is the price that the Musilim buys the house at agreed when the morgage is agreed with the bank because inflation rates/property prices in that area could change rapidly.
Thanks Louise....how's Hitchin? My town!

How is the higher price established is a very interesting point. If it's established at a time the mortgage is taken then that could mean paying a much higher or much lower than market value for the property later on down the road.

What happens if you save this money in the bank and later decide you don't want to buy it? Can you take your money out of the bank and hand the keys back to the mortgage company?

Not paying interest? Can't way to see the anti-discriminatory law suits on this one!
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Juwel
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(Original post by amazingtrade)
Why does this only apply to muslims and not christians?
Muslims aren't allowed to pay interest. No one wants to discriminate, just allow practicing Muslims to buy a house.
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EconLou
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(Original post by amazingtrade)
Why does this only apply to muslims and not christians?
I am almost certain it is not only for muslims or christians. it is always described as a muslim friendly morgage, so anyone can take it out, but I think most would prefer the usual morgage, and I suspect financially the standard morgage is better.It is only muslim friendly because it get around their rule about no interest.
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roff
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Correct me if I'm wrong but haven't Muslims been buying property in the UK long before this Islamic mortgage thing was introduced? And they didn't seem to have a problem with its non-existance before? :confused:
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Juwel
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(Original post by koldtoast)
Correct me if I'm wrong but haven't Muslims been buying property in the UK long before this Islamic mortgage thing was introduced? And they didn't seem to have a problem with its non-existance before? :confused:
Well there was no alternative before was there, so interest was the lesser of two bads.
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viviki
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Well surely anyone could say they were a Muslim and get one. Surely they cant check or make you sit a test?
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Juwel
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(Original post by viviki)
Well surely anyone could say they were a Muslim and get one. Surely they cant check or make you sit a test?
It's not as if there's any financial gain to be had.
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EconLou
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(Original post by Howard)
Thanks Louise....how's Hitchin? My town!

How is the higher price established is a very interesting point. If it's established at a time the mortgage is taken then that could mean paying a much higher or much lower than market value for the property later on down the road.

What happens if you save this money in the bank and later decide you don't want to buy it? Can you take your money out of the bank and hand the keys back to the mortgage company?

Not paying interest? Can't way to see the anti-discriminatory law suits on this one!
Hitchin's fine thanks, where is Hitchin do you live??
I think that a contract is invloved saying that the money has to be used on a house, I think you are free to move house aslong as the bank's money is secured on something.
Effectively you are paying interest because you are always going to buy the house from the bank for more than they sold it to you for, and I suspect these types of morgage more expensive than usual. I think most people would be happier owning their house and having a lone than having to pay a loan before buying the house so I can't see many non-christians complaning. I also think the banks would be happy to offer this sceme to non-muslims as well because as you save the money for the house you are saving with the bank so they have their hands on some of your money.
These types of moragages have been going on for ages, I am not sure why they have become a topic of discussion recently, maybe its the changing of the stamp duty laws.
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EconLou
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(Original post by koldtoast)
Correct me if I'm wrong but haven't Muslims been buying property in the UK long before this Islamic mortgage thing was introduced? And they didn't seem to have a problem with its non-existance before? :confused:
Islamic morgages have been around for ages, it is only recently that the hightstreet banks have cottoned on that there is a market for them. Many Muslim or Middle Easten banks specialise in them.
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