What is the difference between an Islamic and conventional mortgage?

A conventional mortgage is where your loan repayments will include paying a rate of interest to the bank, this is their profit for lending you the funds.

An Islamic mortgage differs from a conventional mortgage because under Shariah Law it is forbidden to charge interest on a loan, so in this case banks will buy the property on your behalf and rent or lease it back to you for a profit.

You can read more about the difference between conventional and Islamic mortgages in our blog here.