It’s a word you are likely to have seen or heard but what exactly does “halal” mean? The Halal Food Authority offers one of the simplest definitions by explaining that halal means permitted or lawful – and contrasts it with its opposite “haram” which means prohibited or unlawful.
Halal is defined, therefore, with reference to the Muslim Sharia law. Within this context, its meaning broadens into concepts of what is permissible, lawful, clean, and ethical.
It is against that background it becomes clearer to think about Islamic mortgages as ethical mortgages – halal mortgages.What is a Halal mortgage and how does it work?
What makes a halal mortgage an ethical mortgage? It is ethical because it complies with Sharia law. Sharia law holds that interest-driven money lending and investment are harmful and, so, prohibited.
A Sharia-compliant or halal mortgage, therefore, is one that does not rely on interest-based borrowing but on somethi…