Sask. broker says halal mortgages are not a new concept in Canada
A Saskatoon mortgage broker says the federal government’s move to help Muslim Canadians get into the housing market by promoting halal mortgages is not such a radical idea — it’s helping families buy their first home without breaking their faith.
The 2024 federal budget included plans to introduce “halal mortgages” as a way to increase access to home ownership. Halal translates to “permissible” in English. The creation of this alternative financing product is a means to enable diverse communities to join the housing market.
“Under Sharia law, which is what most Muslims follow, you are not able to pay interest, which obviously doesn’t jive well with a mortgage or financial product that charges interest,” Saskatoon-based broker Conrad Neufeldt told CTV News.
This is a major barrier for those who follow the Islamic faith because interest is at the heart of the Canadian mortgage and housing system.
According to Neufeldt, there are three main types of Halal mortgages.
One acts as a rent-to-own agreement where the lender buys the property then essentially transfers ownership once rent fees are paid.
Another version is where the home is purchased in partnership with the lender, and they are co-owners.
The most popular, according to Neufeldt, is cost-plus financing — where the lender purchases the home and sells it back at an increased price.
“They’d sell it back to you at a prescribed price so if the house was worth $1 million they buy it and sell it back to you at $1.6 million, so you wouldn’t be paying interest, but would be paying for the house at a higher price,” he says.
Neufeldt hasn’t personally heard of halal mortgages being utilized in Saskatchewan, but says they are nothing new in Canada, and are common in Ontario.
Canadian Bankers Association spokesperson Maggie Cheung told CTV News in an email statement that it’s a way to reach out to more Canadians interested in home ownership.
“Canada's banks are client-driven businesses and continually innovate to respond to evolving customer preferences. We continue to engage in discussions with governments and regulators as a matter of course to explore new ways to serve Canadians and better support the needs of all Canadians seeking to become homeowners.”
Neufeldt, who has been a mortgage broker for 10 years, says halal mortgages can mean more fees and penalties overall.
“I think some people think it’s free money, like the government is trying to give away free money. That’s not the case at all. Halal mortgages don’t have interest, but there’s still a cost. In fact, more often than not, halal mortgages are more costly,” he says.
Neufeldt doesn’t expect to see halal mortgages take off across Canada right away, as lenders will need to work out specifics first.
CTVNews.ca Top Stories
4th Indian national arrested, charged with murder of Hardeep Singh Nijjar
Homicide investigators in B.C. say murder charges have been laid against a fourth Indian national in connection to the killing of Sikh activist Hardeep Singh Nijjar outside a Surrey gurdwara last year.
'I am angry': Alberta farmers will continue fight over world class motorsport resort
The rolling hills leading to the hamlet of Rosebud are dotted with sprawling farms and cattle pastures -- and a sign sporting a simple message: No Race Track.
Man ticketed after allegedly trespassing again at Drake's Bridle Path mansion to get his bike
A man who tried to access Drake’s Bridle Path mansion earlier this week returned to the property Saturday and was apprehended again for allegedly trespassing, Toronto police say.
Couple randomly attacked, 1 stabbed, by group of teens in Toronto, police say
A man has been transported to hospital after police say he was stabbed in a random attack carried out by a group of teens in Toronto on Friday night.
Millions of Canadians have been exposed to potentially toxic chemicals, and they're not going anywhere
For decades, North Bay, Ontario's water supply has harboured chemicals associated with liver and developmental issues, cancer and complications with pregnancy. It's far from the only city with that problem.
Biden calls Trump 'unhinged,' says 'something snapped' in former president after he lost 2020 U.S. election
U.S. President Joe Biden on Saturday called Donald Trump “clearly unhinged” and claimed that “something snapped” in the former president after he lost the 2020 election.
Wildfire that forced evacuation of Fort Nelson, B.C., caused by tree falling on wires, mayor says
The wildfire that prompted the evacuation of more than 3,000 people near Fort Nelson, B.C., was caused by a tree falling on wires, according to the municipality's mayor.
Switzerland's Nemo wins 68th Eurovision Song Contest
Swiss singer Nemo won the 68th Eurovision Song Contest on Saturday night with 'The Code,' an operatic ode to the singer’s journey toward embracing their nongender identity.
IN PICTURES Northern lights dance across the night sky in southern Ont.
From London, to Grand Bend, Collingwood and Guelph, here are some highlights of Friday night and Saturday morning's northern lights display.