Is Zakat obligatory on bank deposits that generate annual returns, and against which a loan was taken to purchase and furnish a home, while the loan installments are still being paid, and if so, how much is its amount?

If the deposit is in an interest-based (riba-based) bank and the depositor receives interest, then this is forbidden usury (riba), and it is obligatory to withdraw it and repent. Zakat is due only on the principal of the deposit (2.5%). As for the interest, it must be disposed of by spending it on charitable causes.

However, if the deposit is in an Islamic bank, then zakat is obligatory on both its principal and its profits (2.5%). The fact that the deposit is pledged (mortgaged) does not prevent the obligation of zakat on it, according to the majority of scholars.