The Official Website of the Office of His Eminence Al-Sayyid Ali Al-Husseini Al-Sistani

Question & Answer » Mortgage

1 Question: Living in Canada is very difficult to avoid mortgage. What is Islamic law about mortgaging a house in Canada?
Answer: You can receive the money not with the intention of borrowing it rather with the intention of securing (istinqaz) the money (from their hands).
2 Question: Some trading and manufacturing companies get loans from private or state banks in Muslim countries and also from other [non-Muslim] institutions with the condition of interest; and they also earn interest on the deposits they leave in those banks. Are we allowed to buy shares from these companies or be partners in their ventures?
Answer: If the partnership with them is like participating in their interest-bearing activities, it is not allowed. However, if Muslims own the company and it receives interest from the banks of non-Muslims, there is no problem [in buying its shares or partnership] from this perspective.
3 Question: Some governments are committed to providing housing for the needy under specific circumstances. Is it permissible for a Muslim to buy a house in which he resides for a short time (so that he will not be liable for khums [on that house]), and then he gives it out on rent so he can then go and live in a house subsidized by the government?
Answer: Khums is not waived from a house just by living in it for a short while without actually being in need of it, as has been presumed in the question.
4 Question: Banks in the West give loans —known as mortgage— to those who do not have enough money to buy houses; this is to be paid back in [weekly or monthly] instalments with a high rate of interest. Is a Muslim allowed to use this facility? If it is not permissible, is there a solution in your view for someone who claims that he needs the mortgage to buy his own residential house and does not possess enough money to pay for it?
Answer: It is permissible to take the money from the bank that is financed by non-Muslim government or private funds but not with the intention of loan. The knowledge that the bank will sooner or later force him to pay the capital as well as the interest does not affect [the lawfulness of] his taking the money.
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