Posted by: islamicfinancingnews | March 7, 2013

Islamic finance and the spring housing market

islam-31 External factors like the economy and government policies can significantly affect the housing market, as well as seasonal influences that typically result in slower home sales during the winter months and greater activity in the summer. That’s why it’s a good idea to have Islamic finance on your side whenever you’re ready to purchase a home or refinance your existing mortgage.

Spring is typically a busy home buying season in Canada and that trend could be fostered this year as one of Canada’s top banks recently cut its five-year fixed mortgage lending rate to under three percent. The Bank of Montreal or BMO has reduced the interest rate on a five-year mortgage from 3.09% to 2.99 percent, the lowest rate offered by the bank since the onset of 2012 and a bold lead other lenders in the country may soon follow. Financial experts expect this type of low lending rate to attract many first time buyers to enter the real estate market and entice current mortgage holders to refinance at a lower rate in order to pay off their mortgages faster.

Record low lending rates can provide a good incentive for people to apply for financing to purchase a home or replace an existing mortgage and Islamic loans can be an excellent alternative for practicing Muslims looking for financing programs free from Riba.

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