Islamic banking was created and came to prominence in the 1970’s to cater for customers with Islamic beliefs. Products and services were created to ensure Muslims could bank and access facilities which comply with Islamic Law.

Islamic banking products have similarities to Conventional banking but are structured in such a way as to be “Sharia Compliant”. Paying or charging interest is prohibited– “All forms of interest are riba and hence prohibited”. Islamic rules on transactions (known as Fiqh al-Muamalat) have been created to prevent use of interest. For example, with a Conventional mortgage product, debit interest would be paid back from the borrower to the bank.

Under an Islamic mortgage, interest is not paid and is replaced by a rental payment to the bank, until such time as the finance is repaid. There are no restrictions for non-Muslims to use Islamic finance too. The costs and terms are very similar or on par with Conventional loan products. Should you require advice or information on Islamic mortgage products, contact Home Matters for a Free consultation.

See also:

Obtaining property finance in Dubai

How to buy a property in Dubai

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