Is Rental Income from a Mortgage Property Haram?
Hanafi Fiqh
Answered by Mawlana Ilyas Patel
Question
Is the rental income from a house bought with an interest-based mortgage considered haram? Additionally, is the increase in the house’s value over time haram?
Answer
In the Name of Allah, the Most Merciful and Compassionate.
I pray you are in good faith and health. Thank you for your question.
The rental income from a house purchased with an interest-based mortgage, as well as any increase in the house’s value over time, is not considered haram.
Rental Income
The rental contract is a separate transaction from the mortgage on the house, so the rent is seen as lawful income. When you buy a house through a conventional mortgage, it becomes your property, even though paying interest is impermissible. Therefore, it is permissible to rent out that property. However, as you mentioned, it is important to pay off the mortgage as soon as possible, within reasonable circumstances.
Increase in Value
Furthermore, the increase in the value of the house over time is independent of the initial mortgage transaction. The fact that the original transaction may have been impermissible does not render the added value of the house impermissible.
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I pray this helps with your question.
Wassalam,
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Abdul-Rahim Reasat
Mawlana Ilyas Patel has received traditional education in various countries. He started his schooling in the UK and completed his hifz of the Quran in India. After that, he joined an Islamic seminary in the UK, where he studied secular and Aalimiyya sciences. Later, he traveled to Karachi, Pakistan, and other Middle Eastern countries to further his education. Mawlana has served as an Imam in the Republic of Ireland for several years and taught the Quran and other Islamic sciences to both children and adults. He also worked as a teacher and librarian at a local Islamic seminary in the UK for 12 years. Presently, he lives in the UK with his wife and is interested in books and gardening.
