What is the difference between an Islamic and conventional mortgage?

With a conventional mortgage, your loan repayments consist of paying a rate of interest to the bank, which serves as their profit for lending you the funds. Conversely, an Islamic mortgage deviates from a conventional mortgage in that, under Shariah Law, charging interest on a loan is prohibited. In an Islamic mortgage, the bank purchases the property on your behalf and subsequently rents or leases it back to you, thereby earning a profit. If you want to inquire about Islamic mortgages, or understand the difference further, schedule a call with one of our advisors here.