What is the ruling of Islamic law regarding the calculated interest – 1% on the first payment and 2% on the second payment – on a 25,000 dinar housing loan, and is it considered usury, given that it is calculated under the heading of banking services for the customer, knowing that the borrower cannot purchase the house without this loan?

The interest that follows a loan is from prohibited riba (usury/interest), whether it is 1% or 2% in exchange for the lending. The claim that it is a fee for banking services does not change its usurious nature. The fee for banking services must be fixed and not vary according to the amount borrowed; otherwise, it would be a trick to legitimize riba. It is not permissible to engage in riba except in cases of dire necessity that permit the eating of carrion and the drinking of wine. Owning a house for habitation falls under the category of need (hajah (definition)), and need does not permit riba.