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muslim friendly mortgages

wiwarin_mir

did you know that HSBC has started giving out 'muslim friendly' mortgages, which have no interest added.

Reply 1

Juwel

18

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.

Reply 2

blissy

15

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 :biggrin:

Reply 3

wiwarin_mir

OP

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 :biggrin:

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.

Reply 4

Juwel

18

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 :biggrin:

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.

Reply 5

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.

Reply 6

Howard

5

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?

Reply 7

EconLou

12

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.

Reply 8

EconLou

12

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.

Reply 9

AT82

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?

Reply 10

Unregistered

I wonder what the costs would be for having to insure a "muslim" house against being blown up by the Israeli army...

Reply 11

Howard

5

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!

Reply 12

Juwel

18

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.

Reply 13

EconLou

12

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.

Reply 14

roff

2

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:

Reply 15

Juwel

18

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.

Reply 16

viviki

14

Well surely anyone could say they were a Muslim and get one. Surely they cant check or make you sit a test?

Reply 17

Juwel

18

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.

Reply 18

EconLou

12

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.

Reply 19

EconLou

12

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.

muslim friendly mortgages

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