How are mortgages relevant in Islam?
Islam is not only a set of beliefs that a muslim must keep, it extends out to the way they must live their life.
Mortgages are a form of interest-based lending from a bank or otherwise. It is mentioned in the Quran:
Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah . But whoever returns to [dealing in interest or usury] – those are the companions of the Fire; they will abide eternally therein.
Taking the ayah into consideration it should be made clear that dealing in interest is totally forbidden which in itself will have grave consequences.
How bad is it to have an interest-based mortgage?
Based on the passage from the Quran below:
“O you who believe, fear Allah and give up what remains of your demand for riba, if you are indeed believers. If you do it not, take notice of war from Allah and His Messenger.”
[Quran 2: 277/278]
Whoever indulges in interest-based lending essentially is declaring war against Allah and His Messenger. For no other sin in the Quran has Allah declared war against other than interest (Riba).
Based solely on this it should be enough for a person to abstain from getting a mortgage as this comes under the category of Riba. Further to this, from the Hadith texts it can be understood that the burden of the sin is shared equally amongst all those involved.
Jabir said that Allah’s Messenger cursed the acceptor of interest and its payer, and one who records it, and the two witnesses, and he said:
They are all equal
What should I do if I already have a mortgage?
You should proactively look for ways to pay off your mortgage as soon as possible so that you can remain out of sin. As the sin does not stop piling up until the person stops committing that sin. So if the mortgage is 25 years, that means 25 years of being at war with God.
Ask family and friends
A potential way to get yourself out of debt to the bank is to ask around family members and friends and ask them to lend you money if possible, interest free. Agree sensible and achievable repayment terms and use the money to pay of the bank in bigger payments. In the long run paying off more your capital and less in interest will make your interest payments lower.
Sell your house and rent a property. Yes it would be nice to have a house that is your own but then again you can invest your money in other halal ways in order to gain more on your money. At least this way you are not in regular major sin territory and you have the potential to make your money work harder for you by investing in yourself, stocks and gold etc.
Buy somewhere cheaper
You may already have some equity in your property which along with borrowing some money from or going into savings when combined could give you enough to buy a similar property to the one you have but in a cheaper area.