Call to offer mortgage packages compatible with Islam
Limerick TD Niall Collins was addressing the fact that Muslims are unable to take out conventional mortgages due to conflicts with the Koran. According to the Koran, riba (loosely translated as interest payment) is prohibited.
As a result, Mr Collins said thousands of Muslims living in Ireland have been unable to purchase their own homes or other properties and have been renting instead.
Mr Collins said: “The UK had similar problems until British banks established special Islamic mortgages that complied with the Koran.
“These ijara mortgages involve a sale and leaseback transaction whereby the bank owns the property for the period of the mortgage and rents it to the buyer. I really believe that if the Irish banks were to introduce these type of mortgages it would help drive demand in the Irish property market.
“I have been speaking to people in the Muslim community and in banking circles and both sides can see the benefits of establishing this type of mortgage.”
The last census figures showed there are 31,779 Muslims living in Ireland.
Mr Collins said: “That is a significant number and a lot of these people are prevented from purchasing property because of the conflict between the Koran and the payment of interest. In the mid-west there are a large number of Muslim health professionals.
“In fact there are more than 4,000 Muslims working in the health service in this country.
“By introducing these mortgage products it would certainly help to drive demand for property in the mid-west region and I believe that it would have a similar effect all around the country. If the Irish banks were to introduce a similar system to the products for Muslims that are in operation in the UK then we would be able to get over this issue. Bank of Ireland in the UK for instance already offers this product.
“Given the changing face of Irish society, I think it is time that these products were offered here.”
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