PM Justin Trudeau to introduce ‘halal mortgage’ for Muslims in Canada

Muslim Mirror ^ | 04 18 2024 | Muslim Mirror Staff

[yesthatjallen]

The Canadian government is exploring options to broaden access to financing alternatives, including halal mortgages. This initiative is part of Prime Minister Justin Trudeau’s efforts to support Canadians aspiring to become homeowners, with a particular focus on the Muslim community.

The ‘Halal Mortgage’ is a significant step towards ensuring that Muslims in Canada can adhere to their religious beliefs while purchasing homes. It is designed to comply with Islamic law, which prohibits the payment or receipt of interest (riba). Instead, the mortgage operates on a ‘rent-to-own’ model, where the bank purchases the property and then sells it back to the homeowner at a higher price, paid in installments.

“This could include changes in the tax treatment of these products or a new regulatory sandbox for financial service providers, while ensuring adequate consumer protections are in place,” the government announced in its Budget 2024.

The Islamic faith considers the charging of interest to be a form of usury, and considers gains made through interest to be unjust.

Other Abrahamic faiths – like Judaism & Christianity – also consider usury to be a sin. However, financial institutions operating in the Islamic world are unique in offering mortgage and lending products that avoid conventional interest payments.

Mortgages compliant with Islamic law are already offered by some financial institutions in Canada, though none of Canada’s five “Big Banks” currently offer them.

SNIP

[Svartalfiar]

Paying a bigger principle?

All this does is instead of charging monthly interest, they just calculate interest over the life of the loan then dump it all in the balance up front.