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Islamic / Muslim Mortgages

How Do Islamic Mortgages Work?

There are two main types of Islamic mortgage available to you in the UK today:

The Ijara Mortgage – "lease to own"

The Murabaha Mortgage – lender resells house to borrower

In the UK, Ijara-based mortgages are by far the most popular and affordable – as you will see, Murabaha-based mortgages require a large amount of available capital.

Ijara Mortgages – Lease To Own

The vast majority of the Islamic mortgages available in the UK are based on the Ijara principle, which can loosely be described as "lease to own". Ijara mortgages work like this:

Using this system, you can borrow as much as 90% of the purchase price of the property, and repay it until you own the house while providing the lender with a profit that is legitimate under Islamic law (Sharia).

Exact details of these schemes vary between lenders. Make sure you understand exactly how your chosen mortgage works before signing up to it.

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Read on about Mortgages for First time Buyers

Read On / Mortgage Guide

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