An Islamic mortgage (or Sharia-compliant home purchase plan) typically requires a deposit of at least 20% of the property's value, although some lenders may accept between 15% and 20%. While 20% is the standard, some providers may offer products requiring 10% or, in rarer, specific schemes, as little as 5%.
Deposit. You'll typically need a deposit of at least 20% of the property to qualify for a Sharia-compliant home purchase plan.
Islamic finance providers require at least 5% of the property price to be held as genuine savings. For example, if you're buying a property for $800,000, you'll need to show $40,000 in genuine savings.
Islamic home financing involves more risk to the financial institution, which means higher price, and in the US supply and demand doesn't help. There are truly sharia-compliant home financing providers like Ameen Housing but they have a waitlist because they are dependent on investor funding to back mortgages.
Is an Islamic mortgage more expensive than a conventional mortgage? They can be, as Sharia-compliant lenders have higher administration costs than mainstream mortgage lenders and fewer lenders overall mean that there is less competition in the market.
Higher costs: Due to additional legal and administrative steps, fees can be higher compared to conventional mortgages. Limited availability: Not all banks offer Islamic mortgage products, making them harder to access in some regions.
Any loan given by Islamic banks must be interest-free. This is because in Islam, usury (charging interest) is seen as fundamentally unjust and unfair.
Qualification requirements for a halal mortgage in Canada
They will likely review your income, credit history, and may require a down payment of at least 20%. Halal Financial Corporation, however, requires a minimum down payment of 25%.
In order to qualify for StrideUp's scheme, you'll need enough cash to purchase 15% of the property upfront. For a £300,00 property for example, you would need £45,000 in cash. If you're buying a new-build flat, you'll need 20%.
Islamic mortgages are mortgages that are compliant with Sharia law. Also known as 'halal mortgages', they differ from traditional home loans in that you don't pay interest as this is forbidden under Sharia law. Making money from money goes against Islamic finance beliefs.
What is the minimum deposit for a mortgage? The minimum deposit you need for a Nationwide mortgage is 5% of the property price, which would be a 95% mortgage.
Page updated 25/09/2025. Vida Homeloans has launched a range of 97% loan-to-value mortgages designed to help borrowers get on the property ladder with a 3% deposit.
Beyond religious edicts, the question of “is mortgage haram mufti menk?” sheds light on broader socio-economic concerns. Renowned scholars like Mufti Menk emphasize the societal pitfalls of interest-based systems. Mortgages, as instruments of riba, perpetuate wealth disparity.
A halal mortgage or Islamic Mortgage is any type of Shariah-compliant financing used to purchase a home. It is characterized and distinguished from a conventional mortgage primarily by the absence of interest / riba.
Under a Sharia-compliant home purchase plan (HPP), your bank will buy your property on your behalf. Bear in mind that you may be asked to pay a deposit between 10% and 35%. Then, your bank will either lease it back to you or levy a profit on top of the purchase price.
Financial challenges
A common criticism of Islamic mortgages is that they tend to be much more expensive than a conventional mortgage. Mainstream banks often come out anywhere between 25% and 30% cheaper than Islamic banks when it comes to mortgages.
By avoiding speculative transactions and focusing on asset-backed financing, halal mortgages provide a transparent and ethical way for Muslim homebuyers to finance their homes. This approach not only complies with Islamic law but also promotes financial stability and fairness throughout the home financing process.
💰 You start with a minimum 10-15% deposit (depending on our offering at the time). 📆 One monthly payment, which consists of: An acquisition portion, allowing you to gradually increase your share. A rental portion, paid to StrideUp for the share they still own.
The average process takes between 6-9 weeks. It can be quicker or slower, depending on the parties in the chain. For example, if you are a first-time buyer, purchasing a new build property with a mortgage in principle, it could take 8 weeks or longer. How long will your house sale take with an Islamic mortgage?
Generally, 0% interest personal loans are rare, as lenders make profit through interest charges. Some credit cards offer introductory 0% APR on purchases or balance transfers for a limited time, but these are not personal loans.
A shariah-compliant current account does not pay interest. The bank gives you access to your money and uses your deposit as an interest-free loan, known as a 'qard', to help finance its operations. If you open a savings account, your bank will invest the money you deposit – but not in anything shariah says is harmful.
Quite simply, interest is considered illegal, unethical, and usurious. This is because Muslims believe that wealth should be generated through legitimate trade and that money should be used in a productive way.