I was in Canada last week and saw an article in the May 23rd edition of the National Post that struck my interest about interest… where it concerns American and Canadian Muslims taking out mortgages.

The story by Carrie Tait, “Faith Based Mortgages Court Muslims”, relayed the fact that Muslim Sharia law prohibits a Muslim from taking out a loan and paying interest on that loan in repayment — a fact I was already aware of. What had not occurred to me, of course, is that one cannot get a house without that interest-bearing mortgage, unless you pay cash for the thing, of course.

As it happens, Tait goes on to describe that there are new mortgage products being devised to comply with Sharia rules because it appears that up to one third of the Muslims in the US and Canada will refuse a conventional mortgage.

These products are different because, “A shariah-approved mortgage could be structured as a co-ownership between the buyer and the lender in which the buyer leases to own — so as to avoid interest payments.”

Tait goes on:

At least another third of Muslims who are comfortable with conventional mortgages can be convinced to choose one closer aligned to their faith, further adding to the market potential, Mr. Sheikh said.

Now, my knee-jerk reaction in this day of heightened conflict between the west and Islam was to be mad that we were, again, bending over backwards to change our own practices to suit their needs instead of expecting them to just live by the rules “when in Rome”.

But, upon reflection, I realized that my knee-jerk reaction was the absolute wrong one to have.

Consider two very important points that argues in favor of these new mortgage products.

#1- Capitalism. These Sharia compliant mortgage products bring large profits to the companies holding them. In Canada the profit margins seem to be between 100 and 300 basis points more expensive than conventional ones and in the US the profit is high as well, though a little smaller at between 40 and 100 basis points.

If people were willing to pay for these products for their own peace of mind and the profits are this rich, why not let them do it?

But more importantly is point #2:

#2- Owning a home is an important aspect of the “American dream.” Owning a home and having a job and family depending upon the upkeep on that home has traditionally invested that family ever more heavily in the American way of life. What could be better to bring them into our world than to see them find themselves dependent upon the same culture, job market and way of life as the rest of us? If we are to assimilate immigrant Muslims into our way of life, owning a home is one giant step toward helping that assimilation along.

In light of these two considerations, I have to come down on the side of supporting these new mortgage products.

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