Using the techniques of Ijara, it is possible to replace an existing interest mortgage with Manzil.

To do this, we must purchase your property from you for its current market value. We will then sell the property back to you for the same price, while charging you rent for the occupation of the house we own.

An example of this is shown below.

Existing interest mortgage with bank or building society £60,000.

Property value £100,000.

• Bank values the property (say £100,000)
• Bank buys property for £100,000.
• You receive £100,000.
• £60,000 is paid to your existing lender to repay the current mortgage.
• £40,000 is paid back to the bank as the first purchase instalment towards your purchase of the property back from the bank.
• The ‘net’ position is therefore that you now owe the bank £60,000 to complete your purchase back from the bank, which will be paid by monthly instalments in the normal way.

Our Shari'ah advice is that it is permissible to operate Manzil in this way to help clients move away from an interest mortgage.