Is it permissible to take out a housing loan with diminishing interest from a commercial bank, where the bank pays the agreed-upon price of the dwelling to the seller after the property becomes owned by the buyer and mortgaged to the bank?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
This transaction is Islamically prohibited due to its inclusion of an interest-bearing loan. The bank lends the customer the price of the house for them to repay it in installments with a pre-agreed interest increase. This is precisely the usury (riba) forbidden by the explicit texts of the Qur'an and . It is obligatory to be wary of such a loan. "And whoever fears Allah – He will make for him a way out and will provide for him from where he does not expect."
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/60534
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 60534
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy