Islamic Finance - The Zero Percent Mortgage

From Finance Documentaries
December 29, 2012 - 1:30pm

This video is part of the Bloomberg series on "Faith in Finance" and focuses on the role of Islamic finance for housing. The documentary looks at how an Islamic mortgage works and also what impact this form of financing is having on London. The London property market has been increasingly attracting foreign investors - and when it comes to Middle Eastern buyers, the preference is to use Shari'ah compliant lending to finance the investments. Essentially the Islamic mortgage seeks to avoid the use of interest as this is basically against the Islamic principles; instead the contract is broadly more akin to a rent-to-buy arrangement. The main components of an Islamic mortgage are: shared ownership, the house is bough along with a bank, rent paid for proportion that is not owned, and extra payments to purchase ownership. Islamic finance has created opportunities for specia...


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