Is it permissible to mortgage a project for less than its cost, while taking a loan from the bank and repaying it over a specified period, in exchange for the bank deducting a fixed percentage as mortgage fees, and is this considered usury (riba)?

A mortgage ( rahn ) serves to document a debt. It is not permissible for the bank to benefit from the mortgaged asset without the permission of the mortgagor. If permission is granted, and the mortgage is in exchange for a loan, then benefiting from it without compensation is not permissible, because it is a loan that draws a benefit, which is riba (usury), unless the mortgagee rents it for its fair market value.

Scholars have unanimously agreed that every loan that draws a benefit is riba. Therefore, benefiting from mortgaged land in exchange for a loan or debt is riba. The purpose of a mortgage is documentation, not exploitation.

If the mortgage percentage is a fixed amount for registration and documentation, there is no harm in it. However, if it is a percentage or for an invalid purpose, or an amount disproportionate to it, then it is a stratagem to conceal riba, as it is not permissible for the bank to derive any benefit from the loan. Any condition for benefit—even through a stratagem—is forbidden riba.