Muslim Link reported that the company has partnered with True North Mortgage and offers a wealth of Islamic financing choices at rates competitive with more conventional mortgages.
Practitioners of Sharia law face a unique predicament when trying to finance a home purchase or improvement—a gap that the modern interest-based financial system has so far filled only sparingly, according to the senior advisor of Zero Mortgage Canada.
“The first challenge is creating a product which meets both Islamic finance conditions and complies with Canada’s strict regulatory framework. On top of that, we have to be able to match the quality of service and the pricing offered by non-Shari’ah compliant sources of home financing,” Omar Rahman said.
A Sharia-based system is specifically tailored for the needs of “usury-averse” individuals, Rahman said.
“With regards to the Shari’ah issues, two key rules in Islamic Finance are to avoid profiting from late payment fees and to avoid oppressing a home owner, especially one headed towards default. We worked hard to convince our partners to comply with these rules and in the end they have accepted our conditions. Of course, our product meets the regulatory and security conditions that mortgages from any Canadian bank are expected to comply with.”
Rahman noted that Zero Mortgage Canada products specifically operate under the “Musharakah” system, which is preferred by Muslim investors despite its fundamental diminishing-returns set-up.
“The key areas in which our product is different is that instead of interest, a ‘home payment amount’ is made on a monthly basis,” he stated. “Secondly, our partners have agreed to comply with all the Shari’ah conditions. Finally, we allow the home owner to utilize the property as they wish, including making home improvements. In fact, potential clients will be excited to hear about our willingness to finance certain home improvements.”
Partnered with one of the country’s leading brokerages, Zero Mortgage Canada is a newly inaugurated firm that caters to Canadian Muslims who require access to halal home financing options.