Personal Finance Question: Are offset mortgages haram?

I was wondering if offset mortgages are haram or halal. This is where the bank that gives you a mortgage will reduce your mortgage balance on which they charge interest by the amount in your savings account.

E.g. I have £100k in a Barclays savings account and I take out a £100k Barclays mortgage. They would not charge me any interest on this basis.

Some lenders will allow you to offset family members’ savings too. E.g. I take out a £300k mortgage with Natwest and my parents have £300k in savings with Natwest, I would not be charged any interest.

I presume this falls foul on the basis that there’s this condition involved but would appreciate your thoughts.

JazakAllah khair

Wa alaykum salaam,

The ruling of offset mortgages is identical to conventional mortgages. Kindly see the following for more information:

Will you be able to link the ruling you are referring too. I’m. Also in the dilemma of taking out a offset mortgage using savings to cancel out the interest portion of the loan please advise in layman terms.

Thank you