What is a 'halal mortgage'? Does it make housing more accessible?

The 2024 federal budget announced on April 16 included plans to introduce “halal mortgages” as a way to increase access to home ownership.

The 2024 federal budget announced on April 16 included plans to introduce “halal mortgages” as a way to increase access to home ownership.

But what is a halal mortgage? Is it going to increase access to home ownership?

Dr. Abdul Aleem, teaching professor at the University of Alberta’s Economic Department says a Halal mortgage is a “permissible” alternative for regular mortgage. He says interest is forbidden according to Islamic Sharia, which is the Islamic law.

“(It) provides a permissible alternative to interest-based mortgages by allowing the Muslims to purchase their own home without having to pay interest, because Islam strictly prohibits it,” Dr. Aleem said.

Dr. Aleem says everyone is eligible to apply for a halal mortgage, citing it’s not discriminatory.

In Canada, there are two companies providing this type of mortgage: Manzil and Eqraz, Dr. Aleem says, noting that they are members of an international organization called the Accounting and Auditing Organization for Islamic Financial Institutions.

If permitted, all Ontarians, regardless of faith, would have access to halal financial products through the province’s financial institutions.