Muslim woman turns to financial institutions for Islam-friendly mortgages

Hard to understand the difference between paying a “premium” and paying interest, given that the cost of money (interest) is likely reflected in the “premium.”

Westpac and Kiwibank said they did not offer a specific Sharia-friendly product and did not have any plans to do so in the near future.

ANZ spokesman Stefan Herrick said demand for Islamic loans was “very low” and the bank did not offer a specific product catering to the community.

The next step was to approach private investors and finance companies in the hope of a better response, she said.

Alternative home finance models exist around the world and have been used in New Zealand in the past.

“Currently there are no options that cater for Muslims in particular so those who find themselves desperate end up compromising their faith and values and take on the traditional mortgage available in order to achieve the dream of owning a home and providing stability to their families.”

The mother-of-two said Islam was not against buying a product like a house from a bank or financial institution in instalments with an added premium but it was not OK to accept a loan of money and pay interest.

“Interest is usury and it means to some extent the rich will keep getting richer and the poor will be poorer.”

The dental hygienist rents a house, which she lives in with her husband and two children, in the south Auckland suburb of Manukau.

Jawadi said she wanted to buy a home as it seemed a waste to pay rent and have nothing to show for it.

Jawadi and other Kiwi Muslims in similar situations could be in luck as New Zealand’s first Islam-friendly KiwiSaver provider plans to offer interest-free mortgages to Muslims.

Muslim woman turns to financial institutions for Islam-friendly mortgages | Stuff.co.nz.