Islamic Home Finance Initiative Launched
Lloyds TSB has launched an Islamic retail mortgage product for British Muslims. It is one of a range of financial services that Lloyds plans to launch for the Muslim community in the UK – many of whom have taken a traditional, interest-based mortgage or choose not to buy their own homes for religious reasons. The home finance offer follows Lloyds’ launch in February 2005 of an Islamic current account and complies with Islamic law (Shariah), which forbids both the payment and receipt of interest, known as Riba. Instead of lending money for a property, the bank will buy the home, contributing up to 90 per cent of the purchase price. The customer will pay the remaining percentage upfront and would repay the outstanding sum over an agreed term, together with a rental payment.