Are conventional mortgages haram, and what are the Islamic alternatives?

A conventional mortgage is an interest-bearing loan, and interest (riba) is clearly and repeatedly forbidden in the Quran, which states that Allah has permitted trade and forbidden riba (2:275) and warns those who persist in it of being at war with Allah and His Messenger (2:278). Because a standard mortgage's core structure is a bank lending money and charging interest on the balance, most scholars hold it impermissible, regardless of what it funds. This creates real hardship in countries without developed Islamic finance, and some scholars have issued limited concessions for those with no other way to secure basic housing, though this is not a blanket permission. The preferred route is Islamic home financing, most commonly structured as Murabaha (the bank buys the property and resells it to the client at a disclosed, fixed profit margin paid in installments) or Musharaka Mutanaqisa (a declining-balance partnership where the bank and client jointly own the property and the client gradually buys out the bank's share while paying rent on the portion still owned by the bank). These structures are designed so the bank shares in real ownership and risk rather than simply lending cash at interest, though real-world Shariah compliance varies by provider and should be checked with a knowledgeable advisor.

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