Major Bank May Offer Islamic Mortgages Soon

Summary


"We plan to launch with one of the Big Five banks a whole suite of products under the UM-branded name, which will be structured to be Shariah compliant."

Several banks contacted by The Canadian Press refused to say whether they were planning to offer so-called Islamic financial services. A spokesman for the Toronto-Dominion Bank, which was rumoured to be one of the financial institutions looking into Shariah mortgages, said TD "has heard from clients who are interested, but we don't have anything to announce right now."

To get around forbidden interest payments on loans, Shariah-compliant mortgages function by having the lender become an equity partner in the purchase of the home. The homeowner then pays monthly "rent" or "profit", along with principal payments, to the financial institution putting up the rest of the purchase price.

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Extract


Major Bank May Offer Islamic Mortgages Soon

No-interest instruments comply with Shariah law

By Julian Beltrame

OTTAWA -- Islamic Shariah-compliant mortgages could be available in Canada through one of the major conventional ...

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