Shariah financing growing popular in the West

a reply to: ChesterJohn

Frankly the arrangement does not sound anymore beneficial than a traditional mortgage:

How does it work if I take out a mortgage?

Islamic mortgages, or house purchase plans (HPPs) can involve ijara, where you are technically leasing the property from the bank, or diminishing Musharaka, where you buy in partnership with the bank and your monthly repayments gradually buy it out. As with a standard mortgage you will usually need a deposit, and you will need to have the house valued before you enter into the arrangement.

You will also be able to fix the amount you pay each month if you wish – for example, the Islamic Bank of Britain offers a fixed rental rate of 3.79% to homebuyers with at least 35% to put down as a deposit, and 4.19% for those with a 20% deposit – both rates are fixed until 31 December 2015. Source

The bank makes their money regardless of the arrangement.

a reply to: AugustusMasonicus

on the surface maybe. You cannot pay off a 30 year mortgage in full 10 years into the loan without being penalized big time.

I would want to pay it off and not have to pay for 30 years of interest just because I paid it off early. most mortgages have that in the fine print.

I like the fact that banks and financial institutions are willing to make an effort to help people by customizing deals, so why not offer everyone a customized deal on purchasing a house or starting a business, not just one group based on their religion.

originally posted by: ChesterJohn
on the surface maybe. You cannot pay off a 30 year mortgage in full 10 years into the loan without being penalized big time.

Where does the article I linked say there is a penalty?

I like the fact that banks and financial institutions are willing to make an effort to help people by customizing deals, so why not offer everyone a customized deal on purchasing a house or starting a business, not just one group based on their religion.

If the sole determiner they are using is religion then I think they would be opening themselves up for legal action.