# Is a mortgage riba?

*Why a mortgage is agency (wakala), not a loan, and so not riba*

- URL: https://muftiabulayth.org/r/rtwywca2-pq/s/6/
- Date: 2021-01-29 · Kind: discussion · Transcript tier: machine · Recording: Shaykh Atabek Shukurov | Mortgages, Madhabs & Molvi-ism | MindTrap 48 | Mufti Abu Layth (23:22–31:13)
- Status: latest answer on its topic; a view quoted in order to be discussed, not a position held
- Watch from the start of the segment: https://www.youtube.com/watch?v=rtwyWCa2-pQ&t=1402s
- Recording page: https://muftiabulayth.org/r/rtwywca2-pq/

**Topics:** Riba, mortgages and loans; Guest conversations

**Summary (not a quotation; machine-made, unchecked):** The guest says a mortgage is not riba because the bank acts as an agent buying a specific house and then sells it on in instalments; riba is only a free loan repaid with extra.

## Longer summary

Mufti Abu Layth and guest recall when the guest's mortgage fatwa became public, about seven or eight years earlier, though he had taught it privately from 2009, and Mufti recalls meeting him in 2006 and discussing a philosopher's adoption of Aristotle's ten intellects [?], which the guest explained by parallels with the angels. Asked his angle on riba, the guest says that, as he believes all schools agree, money given with instructions on how to use it is not a loan, because the giver remains in charge; it is wakala, agency, as when the bank says to buy a specific house and may sue for misuse. Riba exists only where one takes money as a loan, is free to use it, and repays it with extra. Asked about paying back more than the price, he gives the example of a seller who will only take cash: he buys the car with his money and sells it to you in instalments. Mufti restates this for viewers as agency followed by a sale, and names a partnership contract whose name the captions do not catch.

## Sources and names cited

- Shaykh Atabek Shukurov (guest)
- riba
- wakala (agency)
- tawkil (appointing an agent)
- bay' (sale)
- Aristotle

## Transcript (machine tier, 23:22–31:13)

[22:58] and low everyone should be equal in front of the low okay and if someone for example extracts or applies the um principles incorrectly. So we have to apply it correctly and highlight where he got it wrong. Do you understand? So everyone in my understanding everyone are equal in front of these principles. Sure. Principles.

[23:22] I mean what I recall she is um you see a couple of when I say couple it's probably your your ribba thing first. What has it been now your fatwa about 7 8 years 10 years or was it about mortgage? Yeah about mortgage. How about 9 years? Um I think about uh seven years I would say about seven eight years ago.

[23:45] But but that was publicly but like privately I was teaching you know in kuduri classes. I think I did uh speak out about it in 2009. So that is 11 years. Yeah. Because I right. So we I don't know if you recall, she but cuz we met um I think it must have been about 2007 or eight or something in Birmingham once.

[24:11] Yeah. So 2006 actually. Yes. Yes. Uh so that time I think you'd you you were still settling in. you you'd come and so I remember meeting you then and we had a very interesting discussion on philosophy and we spoke you you you spoke to me about and the the and and I have to say people that it was actually then in 2006 and I you know that I was quite confused with this concept of how um you see because takes the 10 intellects of Aristotle and accepts them and obviously goes on and I was confused

[24:50] because you have this you know this uh the the first kind of uh this intellect and I remember asking you that look sheh how do how do you reconcile this how does this work and you know scholars and you explained that look well the Islamic way is kind of seeing it almost like angels and you know like the angel Gabriel or something like as a you know they're seeing it with these parallels and uh and I remember you explaining that to me we were sitting at uh uh at Shaaban's house actually and it was but I still recall that and mashallah so benefits look at that people look at those look how long how time flies but then after something

[25:29] like uh I think several years so it must have been about 8 years ago you kind of uh metaphorically you kind of blow up this whole uh you know with the mortgages thing everybody's talking about you that this this sh has issued a fatwas challenging muaki and challenging uh all these people and people like who is this guy and everybody's kind of like became wo like he was there and it's just huge.

[25:59] going back to that time she so you decided to go public uh so at that time so about maybe I think it's been about 7 8 years um so what was all this about the ribba thing I mean obviously it's about saying ribba is not haram but for people cuz you come at it from a different angle cuz so what's what's your angle on this ribba thing so [clears throat] so it's again the same thing you know um the principles should be implemented correctly so if there is some stiff exemption So that exemption also should be involved you know.

[26:30] So all of these nuances if you apply them you get the correct uh conclusion you know. So anyway just uh I think I think it is agreed upon between all of the schools of thought. Obviously you are Maliki maybe you you will comment on this point from the Maliki school of thought. So if someone gives you money and dictates and instructs you what to do with it.

[26:55] So he's not giving you [clears throat] it's not a loan because he's still in charge. Understand? For it to be loan, you have to be fully free with it. So the person who is giving it to you, so he should not be instructing. He should not be um telling you what to do with it. This is more like wala. This is like it's an agent. Yeah. Because he's telling you, so he's giving it to you and saying go and buy that specific house.

[27:24] M but look if you you are not allowed to buy another house okay and if you mess up with these funds if you do something that we're not telling you we are uh we have right to sue you in the court so means you are not free with the money it's just pure tok so whenever there is no loan they we we cannot we cannot talk about um usery we cannot talk about ribba So ribba will be only you take money and as a loan and you are free to do whatever you want and you pay it back

[28:02] with extra only that is um that is uh ribba. So the angle so just for the people in case you didn't follow what the sheh was explaining is that you see [clears throat] the normal understanding that people have is that ribba the banks you go to the bank ask for a mortgage they give you this loan and you're paying back more.

[28:28] Now what the sheh has highlighted is actually there's a delineating factor. There's something that separates this. This isn't just like a loan. You are the bank is acting as an agent because you know it's not this money that is just you can do anything with it. You've got to buy a specific house and it's a specific thing. So this is called this this agent acting as an this agency is called wakala in the shar.

[28:55] So these people uh are they are wakil this is tokil is is the verbal noun and you are then so the angle of loaning is kind of removed but sheh people would then argue and as they did that look but you're still paying back the you know more than the initial so the person is selling the house for 100,000 you end up paying the bank back let's a couple of hundred thousand.

[29:28] Um so what about that angle? Yeah. Yeah. Obviously that is called means for example let's um you want to buy a car but you don't have a money. So you and you will go to the seller saying look I will buy it but in several installments okay the seller says look forget about it you have to pay me straight away. So means either everything in you know cash or either you are not buying uh um the car.

[29:56] So then you will come to me because I have a money. So you will say to me please can you buy this car and I will buy it of you but in installments because the seller is not willing to sell it for installments but he wants to get paid at once because you have the money. So go and you know buy the car, pay at once and then sell it to me.

[30:22] I will pay you the money in installments. So that's what technically is happening. So it's so it's technically there's tokil and then there's also a bay going on to kind of yeah to to to buy it back. Okay. So that's the that's so that's those of you that didn't understand that. So just what the sheh explained is that you see you set an agent but you haven't got the money.

[30:47] This is the agent's money. They are investing it with the understanding that you will now buy it from them for the new price which is this ribba price uh or sorry what people will call a ribbar price but which is this new interest and the technical term is in the Sharia used with where you have a project a joint project and you all can make profit from it.

## Cite

Mufti Abu Layth Archive, segment rtwyWCa2-pQ/s/6. https://muftiabulayth.org/r/rtwywca2-pq/s/6/

Not a fatwa: these answers were given to specific people at specific times. Ask a qualified scholar about your own situation.