Advantages of an Islamic mortgage
What are the advantages/disadvantages of an Islamic mortgage
The advantages to a Muslim are obvious - it allows Muslims to buy a property without it conflicting with their religion, something which hasn’t always been possible in the UK, forcing Muslims to rent. Many of these schemes carry early redemption charges, which is a strong consideration.
The disadvantages are the high repayments and the large amount of money needed to start an Islamic mortgage.
Lenders for Islamic mortgages typically require at least 10% as a deposit but the Murabahah and Ijara schemes can require a minimum 20% deposit from the client which obviously doesn’t compete with interest based lenders who can offer 100% mortgages.
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