Alberta introduces new regulations allowing halal mortgages

The Government of Alberta has introduced legislation that will allow provincially regulated banks to offer halal home finance products.

Paying and receiving interest is prohibited in the Islamic faith, which means that traditional interest-only mortgages are not an option for many Muslims in Canada.

Several private lending companies now offer alternative financing plans that do not include interest payments, but these alternatives are not available through any of the major Canadian banks.

Alberta Finance Minister Nate Horner says the regulations allow credit unions and ATB Financial to offer halal mortgage loans, but banks will not be required to do so.

Horner says he expects these financial institutions to develop their products quickly because the industry has been pushing for regulatory changes.

There are several different types of halal home financing, such as a program in which a financial institution purchases a home on behalf of a customer and charges fixed monthly fees – including a profit margin – until the customer’s home is paid off.

This report by The Canadian Press was first published Nov. 4, 2024.