Is a conventional mortgage halal? The honest answer

Why the conventional mortgage is a problem

You borrow a principal sum and repay more than you borrowed, with the excess charged for the use of the money over time. That is the textbook case of riba, and mainstream scholarship treats it as impermissible.

The necessity argument

A minority position has permitted it. The best known statement is the European Council for Fatwa and Research's ruling at its fourth session in Dublin in October 1999, which allowed an interest-based mortgage for a first home where no Islamic alternative was available, on three conditions: the house must be for the buyer's own household, the buyer must own no other home, and he must have no surplus assets that would let him buy another way. It rested on two arguments — that a general need can take the ruling of necessity, and that some early jurists permitted riba transactions outside Muslim territory. Both were criticised heavily, including by Dr Salah al-Sawi, who argued the second permits a Muslim to receive a surplus rather than pay one and rests on a weak narration; Shaykh Wahba al-Zuhayli and the OIC Islamic Fiqh Academy also rejected it. The Council itself acknowledged that most muftis had forbidden the transaction for the previous twenty-five years. The argument has real weight where renting is genuinely unavailable or ruinous. It weakens as alternatives appear, and Canada now has several. The argument has real weight where renting is genuinely unavailable or ruinous. It weakens as alternatives appear, and Canada now has several.

The structures offered instead

Murabaha, where the financier buys the property and sells it to you at a marked-up price paid in instalments. Ijara, a lease ending in ownership transfer. Diminishing musharaka, a partnership where your share grows as you buy the financier's share down. All are offered in Canada.

Why they cost more, and whether that is a scandal

They usually do cost more, for unglamorous reasons: smaller providers, less access to cheap funding, no mortgage-backed securities market, and higher legal and administrative costs per transaction. That is a market-structure problem, not evidence of bad faith.

The question underneath the question

Most people asking this are really asking whether they must stay renters. It is worth separating the two: the goal of owning a home and the method of financing it are different decisions, and building equity through other permissible assets is a third path that is rarely put on the table.