Does Islam Allow Buying House On Bank Loan or Not?

Taking a bank loan in interest is Haram.
Islam Allows Buying House On Bank Loan or Not

Buying a house is a dream of every individual, but achieving this dream is not as easy as it seems.

Some people take bank loans when purchasing a house for themselves. But what Islam says about this? Does it permit it or not? This article will answer this question of yours.

House is the basic necessity of a person. You are blessed if you have your own home. Every person tries to buy their own house at any cost. Someone tries to save money by buying a house, and someone borrows money from relatives

There is nothing wrong with these options. These are halal. But then someone who is not able to save money and borrow from relatives decides to take a loan from the bank to buy his own house.

However many of them remain confused about whether it is halal to take a loan from a bank or not.

Is it Permissible to take a loan from a Bank?

There are two types of loans taken from the bank:

  • Loan from a Conventional Bank at Interest

When you take a loan from a conventional bank, they give you the loan on an interest basis, or you can say they give you the loan on the Riba system. You have to provide them with a fixed rate of interest for the whole period of the loan or the entire age of the loan.

This is haram and prohibited by Islamic rules. Living in a rental house is more suitable than living in an own-interest-based loan house.

  • Loan from Islamic Bank at no Interest

Non-conventional or Islamic banks grant interest-free loans called goodly loans, or in simple language, it is called qard-e-hasna. They give you an interest-free loan. You have to return the actual amount of the loan, neither less nor more.

They aim to follow the Islamic rules. So if we take a good loan from a bank to buy the house, then there is nothing wrong with it.


  • In Sahih Muslim 1598 it has been stated that Allah has cursed the accepter, payer, and recorder of interest.
  • In Surah Al Baqarah verse 275, interest has been stated as forbidden. The ones who consume and give interest are referred to as the People of Fire.

Bottom Line

The question of whether it is permissible to take a loan from a bank depends on the interest factor. If the loan is interest-free then it is completely okay. However, if it has an interest rate it should be avoided.

Got a question? Feel free to ask mufti and get quick answers.


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