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Rates are based on an average mortgage of $300,001
| Insured | 80% LTV | 65% LTV | Uninsured | Bank Rate | |
|---|---|---|---|---|---|
| 1-year fixed rate | 4.99% | 5.60% | 5.60% | 6.69% |
6.79%
|
| 2-year fixed rate | 5.67% | 5.30% | 5.30% | 6.04% |
6.39%
|
| 3-year fixed rate | 4.79% | 4.94% | 4.94% | 4.94% |
5.55%
|
| 4-year fixed rate | 4.94% | 4.94% | 4.94% | 5.09% |
5.29%
|
| 5-year fixed rate | 4.74% | 4.79% | 4.79% | 4.94% |
4.84%
|
| 7-year fixed rate | 4.94% | 5.29% | 5.29% | 5.09% |
5.90%
|
| 10-year fixed rate | 5.74% | 5.89% | 5.89% | 5.84% |
7.25%
|
| 3-year variable rate | 6.10% | 6.55% | 6.55% | N/A |
8.60%
|
| 5-year variable rate | 5.90% | 6.10% | 6.10% | 6.25% |
6.59%
|
| HELOC rate | 7.20% | 7.20% | 7.20% | 7.20% | N/A |
| Stress test | 6.74% | 6.79% | 6.79% | 5.25% | N/A |
Halal is a term that signifies compliance with Shariah, the Islamic religious law which does not allow for the use of Riba, also known as interest. This is because interest is regarded as an arrangement that exploits the poor (the lendee) while rewarding the rich (the lender) who is without pressure to add extra value.
Until halal mortgages were established, many Muslim Canadians were unable to purchase a home with a mortgage while also maintaining their faith.
As Canada’s Muslim population continues to grow, financial experts anticipate that demand for Islamic financing options will also increase.
Halal mortgages are Shariah-compliant, structured according to underlying principles known as Ijara, Murabaha or Musharaka.
Each is described below:
The requirements for a halal mortgage depend on what type of agreement the lendee enters with the lender, who will lead the qualification process.
In general, the lender must gauge what collateral is available to help manage any risk they assume by purchasing the home – whether it’s by Murabaha or Musharaka.
Typically, a deposit of 5-35% is required.
Lendees should also expect that they’ll be asked to reflect the income they have available to make monthly payments. Depending on the lender, the qualification process may require a credit check. In Canada, that can only be done with permission.
Each financial institution that offers Shariah-compliant mortgages in Canada is an associate member of The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
This international not-for-profit, which is based in Bahrain and regulated by the central bank of Bahrain, is dedicated to the standardization and harmonization of international Islamic finance practices and financial reporting in accordance to Shariah.
Some of those that offer Halal mortgages, include:
Manzil is a Canada-based company that considers itself the only provider of Islamic finance in Canada that follows all guidelines for Shariah governance established by AAOIFI.
Yes, there are several financial institutions in Canada that now offer halal mortgages. We recommend that applicants work with a financial institution that can confirm it’s an associate member of The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
This international not-for-profit, which is based in Bahrain and regulated by the central bank of Bahrain, is dedicated to the standardization and harmonization of international Islamic finance practices and financial reporting in accordance to Shariah.
Any financial institution in Canada that offers halal mortgages will be able to reflect on what it considers its product to be Shariah compliant. Manzil, a Canada-based company, considers itself the only provider of Islamic finance in Canada that follows all guidelines for Shariah governance established by AAOIFI.
Depending on the type of halal mortgage, monthly payments may be more expensive than for a traditional mortgage. In the case of Murabaha home financing solution, fixed monthly payments are made against a loan amount which has been marked up over a fixed period.
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