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
Hackers release corporate data stolen from London Drugs
Retailer London Drugs says cybercriminals who stole files from its corporate head office last month have released some of the data after it refused to pay a ransom.
Toronto man falls off his chair after seeing $70M Lotto Max win in his bank account
A Toronto man who won $70 million in a recent Lotto Max draw literally fell off his chair when he saw the funds in his bank account.
Montreal-area high school students protest 'sexist' dress code
Approximately 50 Montreal-area students — the vast majority of them female — were suspended Wednesday after their school deemed the shorts they were wearing were too short. On Thursday, several students staged a walk-out to protest what they believe is a "sexist" dress code that unfairly targets girls.
McDavid scores in 2OT to lift Oilers over Stars in West Final opener
Connor McDavid tipped Evan Bouchard's shot from the boards past Dallas Stars goalie Jake Oettinger 32 seconds into the second overtime to give the Edmonton Oilers a 3-2 win in Game 1 of the Western Conference Final..
'Looking over our shoulders': A killing looms large in a little B.C. town
Something shifted in the pretty little village of Lumby, B.C., after Tatjana Stefanski vanished. It used to be the sort of place where parents let their kids roam free or play in the local creek, but everything has changed.
What is 'slapped cheek disease' and should parents be concerned?
Despite its rough name, experts say most cases of 'slapped cheek disease' are mild and not a cause for concern.
American Airlines retreats after blaming a 9-year-old for not seeing a hidden camera in a lavatory
American Airlines has distanced itself from a court filing in which the carrier said a nine-year-old girl should have noticed there was a camera taped to the seat of an airplane lavatory.
Unknown Newfoundland soldier from the First World War heads back home from France after 100 years
Canadian soldiers and government officials arrived in northeastern France this week for a historic mission: returning an unknown Newfoundland soldier back home.
Calgary Philharmonic takes action following investigation into 'deeply troubling' comments by 2 musicians
The Calgary Philharmonic has confirmed its taking action after controversial online comments made by two members of the orchestra.