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
Grandparents killed in wrong-way crash on Hwy. 401 identified
A 60-year-old man and a 55-year-old woman killed in a wrong-way crash on Highway 401 earlier this week have been identified by the Consulate General of India in Toronto.
Police arrest 3 Indian nationals in killing of B.C. Sikh activist Hardeep Singh Nijjar
Three people have been arrested and charged in the killing of B.C. Sikh activist Hardeep Singh Nijjar – as authorities continue investigating potential connections to the Indian government.
TD worst-case scenario more likely after drug money laundering allegations: analyst
TD Bank Group could be hit with more severe penalties than previously expected, says a banking analyst after a report that the investigation it faces in the U.S. is tied to laundering illicit fentanyl profits.
Quebec man who threatened Trudeau, Legault online sentenced to 20 months in jail
A Quebec man who pleaded guilty to threatening Prime Minister Justin Trudeau and Premier François Legault has been sentenced to 20 months in jail.
Human remains found in rural Sask. possibly a decade old, RCMP say
RCMP say human remains found in a rural area in central Saskatchewan may have been there for a decade or more.
Britney Spears 'home and safe' after paramedics responded to an incident at the Chateau Marmont, source tells CNN
A source close to singer Britney Spears tells CNN that the pop star is 'home and safe' after she had a 'major fight' with her boyfriend on Wednesday night at the Chateau Marmont in West Hollywood.
Canadian doctor concerned new weight-loss drug Wegovy may be used inappropriately
As Wegovy becomes available to Canadians starting Monday, a medical expert is cautioning patients wanting to use the drug to lose weight that no medication is a ''magic bullet,' and the new medication is meant particularly for people who meet certain criteria related to obesity and weight.
Drew Carey is never quitting 'The Price Is Right'
Drew Carey took over as host of 'The Price Is Right' and hopes he’s there for life. 'I'm not going anywhere,' he told 'Entertainment Tonight' of the job he took over from longtime host Bob Barker in 2007.
Biscuits with possible plastic pieces, metal found in ground pork: Here are the recalls for this week
Here are the latest recalls Canadians should watch out for, according to Health Canada and the Canadian Food Inspection Agency.