Mohamad Sawwaf on Why You Should Consider a Halal Mortgage

What is a Halal Mortgage?

Islamic mortgages have become increasingly prevalent in recent years with the Islamic finance sector growing approximately 15–25% per year. Islamic finance operates by Shariah or Islamic law, which forbids the paying and receiving of interest or “riba”. A Halal mortgage ultimately provides prospective home buyers with an opportunity to purchase a home without compounded interest. Mohamad Sawwaf is the founder and CEO of Manzil and a lecturer of Islamic and Corporate Finance at the Business Schools in Toronto. He claims that Islamic finance is founded on fundamental principles of ethics. Islam considers interest payments as an exploitative practice, which favours the lender at the expense of the borrower. Mohamad Sawwaf takes the time to outline some of the various advantages of a Halal mortgage when purchasing a property.

Potential Lower Overall Cost

It is a common misconception that Islamic financing is significantly more expensive than conventional home loans. However, recent studies suggest that Islamic financing has evolved to be just as competitive as conventional loan services and may save individuals a significant amount of capital in the long run.

No Compounded Interest

Islamic financing prohibits the payment or receiving of interest or riba. A Halal mortgage allows prospective buyers to work with companies such as Manzil Murabaha to balance their material needs with their spiritual obligations. Mohamad Sawwaf says that his team of professionals works diligently with the prospective buyer(s) to select a property and through their custom services determine a set price and payment terms. Manzil then purchases the property and sells it back to the client, and the sale is recorded in a Murabaha mortgage contract. The maximum repayment term is 25 years and individuals can repay their loan in full at any point in time without receiving a penalty. The company is currently the only provider of a 25-year mortgage.

Easy to Understand

Mohamad Sawwaf claims that despite various complexities of Islamic Finance, Halal mortgages are relatively simpler to understand. For the average person, keeping track of interest month to month is enough of a hassle that it is understandable why prospective homebuyers would look for a simpler alternative. Instead, customers repay their loans in equal instalments throughout their mortgage.

Trusting Industry Professionals

With extensive industry experience, Mohamad Sawwaf takes pride in his ability to help individuals find and purchase their future homes. He claims that according to a recent report taken by the Pew Research Center, by 2030 there will be approximately 2.7 million Muslims living in Canada. As a result, more individuals will be looking to purchase Halal mortgages. For information regarding Manzil’s services, please visit https://www.manzil.ca/.