Zero Mortgage Canada

Assalam alaikum

Would you have any information on whether Zero Mortgage, an organization offering halal mortgages in Canada, is reliable in terms of their Shari’ah compliance?

Jazakallahu khayran.

Wa alaykum salaam,

Do they have a Shariah board?

Mufti Ismail Desai is their Shari’ah Consultant.

Apparently they have a Shari’ah board comprising of Dr. Zubair Usmani, Sh. Nizam Yaquby and Dr. Aznan Hasan. But the fatwa from this Board is dated from 2011 so I don’t know if it is active right now.

You must ask them when their last Shariah audit was done. Ideally, a Shariah certificate should be updated with the latest audit.

Assalamualaikum wrb,

Recently there was a comment on of the YouTube channels (Ali Tunio, Realtor) that Mufti Zubair Usmani is no more part of ZeroMortgage Sharia board and that he resigned. I cannot be sure about this though, I don’t live in Toronto area nor know the mufti personally, so please do your research.

On my part - I did attend a webinar organised recently by the ZeroMortgage group. I was not satisfied with their explanations of the contract etc. To me it seemed like a contract with the financial institution with almost all same conditions and obligations. I posted a bunch of questions and clarifications to them and still have to get answers. My question that I asked them are listed below, going by the lack of response (almost two months to date), I personally am not inclined or satisfied with their process. It’s my view though, hope that helps. I suggest you also read and do some research and share, Allah SWT knows best and will surely guide us all on the right path.

My questions to ZeroMortgage :

  • Is the diminishing Musharaka a legal document, I mean does zero mortgage file that in the land deeds office and accordingly allocates a percentage of property between the lender and the borrower?
  • If the complete ownership of property is with borrower, how can it be considered diminishing?
  • If the payments are to be considered as rent, then why is the relevant market value of rent for the property not considered? And also how can that be fixed for say 5 years if we take a fixed term contract?
  • The value of the property with time (increase or esp. decrease) does not affect the amount owed back to the lender. Isn’t that a pure finance? There’s no risk shared by the lender, Musharaka contracts mean the loss should be shared. Is this truly halal?

Wa alaykum salaam,

Have you raised these questions with Mufti Ismail Desai?

Assalamu Alaikum,

One thing that concerns me is that they require explicitly signing an interest-based contract as per the FAQ:

8. Why does the mortgage documentation from the lender use the terms “interest” and “loan”? Why is the structure this way?
Remember, Halal Banking is a relatively new concept in Canada and the terms that we use, such as Home Payment Amount and Profit Amount, are not used in current Canadian regulations. All institutions in Canada use the standard forms and lending terminology with respect to mortgage transactions. The government has yet to approve modifications to these terms to adapt to our product and others in which interest is not present. The Ethics Board issued the fatwa on our website which states that given the nature of financing in Canada, such disclosures can be used without affecting the halal nature of the product. This is not something new in Canada, the leading Halal financing company in the USA, Guidance Residential, in their fatwa allow clients to use the term interest in documentation due to USA law.

I am not sure if it’s possible for a mortgage to be halal when you sign a contract agreeing to an interest rate?

Kindly raise this with their Shariah advisor.

Asalamo Alaikum
FYI- There is a March 2021 DArul Iftaa, Durban fatwa available at the following link, which ststaes that “Should we receive a written response from their Shariah board in the manner requested, we will not hesitate to review our fatwa. Until then, our conclusion is that **Zero Mortgage is not Shariah compliant”. Given the presence of a conventional loan agreement, we would caution the public from falling into riba.
Please read the full documnet.

Here is an AAOIFI compliance review of Zero Mortgage.