What is the difference between the permissibility of purchasing cars through banks and the prohibition of purchasing homes through them, knowing that the method of purchasing homes involves the buyer designating the home, after which the bank undertakes its purchase and pays its price to the seller, so that the home becomes the property of the buyer, provided that the buyer repays the bank the amount in installments with added interest, with the possibility for the buyer to sell the property before the end of the repayment period on condition of repaying the remaining amount to the bank with interest?
The method of operation for interest-based banks in financing homes or cars is one and the same: the bank pays on behalf of the customer, then charges the customer in installments the amount paid, with an interest-based increase. This is pure usury (riba). Interest-based banks do not buy or sell; their primary function is to trade in debts through lending and borrowing. It is possible that whoever permitted the purchase of cars in that manner intended what takes place in Islamic banks, which is the murabaha (cost-plus financing) sale to a customer who promises to purchase.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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