Lloyds TSB Launches Muslim Mortgage
The high street bank launches a new Sharia-compliant mortgage
22nd March 2005
Lloyds TSB has announced the launch of a Sharia-compliant Muslim mortgage, following the high street bank's launch of a Muslim current account last month.
Under Sharia law it is forbidden to charge or receive interest on loans, meaning that traditional UK mortgages are against the Islamic faith.
With a Muslim Mortgage the bank buys a property for the customer to live in, and the customer repays the loan amount interest-free over the term of the mortgage.
To provide a profit for the bank, a monthly rent is charged which decreases until the debt is paid off, at which point ownership of the property passes to the borrower.
Read More: Guardian Money
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