Asalaamwualaikum. All Praise is due to Allah (SWT). Mufti, with the salary that I earn, it is impossible for me to buy a house at current prices.I have made inquiries at a local Islamic Bank. They offer a product where the bank purchases a house, adds a profit to the purchase price and the re-sells the property on to a client. The client then pays off this total amount [which is fixed] at monthly intervals over a period of several years. Is this form of financing permissible or does it constitute an interest bearing transaction? The reason I ask is because conventional banks also offer to “fix” the interest rate on a home loan, whererby one will also pay a fixed monthly installment over a number of years.
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Question ID: 27974