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Is it permissible, according to Islamic jurisprudence, for a bank to purchase a house in installments with an increase over the original price, take a down payment from the buyer, and then allow the remaining amount to be paid in installments over several years?

1 min readAlso available in العربية

This transaction has two forms:

The first: That the bank sells a house it purchased and brought into its possession to a third party at an installment price, even if it is in installments and for more than the original price. This sale is called Murabaha sale and it is permissible.

The second: That the final buyer purchases the house directly from its owner, and the bank pays the price to the house owner, then the bank records an amount on the final buyer that exceeds the price paid. This is not permissible, because it is a loan that draws a benefit.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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