Lloyds trials Islamic mortgages

Lloyds Bank is launching a new mortgage package which complies with Islamic Law.

Under Islamic, or Sharia Law, Muslims are not allowed to pay or accept interest. This means many are forced to either break Islamic law or find alternative means of getting on the property ladder.

Lloyds has said that it wants to offer an alternative service to Muslims who had decided not to buy a home for religious reasons or have had to take on a normal mortgage.

Under the terms of the new mortgage, Lloyds will not lend money but will buy the house by providing up to 90% of the purchase price. Following this, the customer will provide the remaining 10% and will agree to paying the total amount back over an agreed term, as well as providing a rental payment.

Many financial analysts have commented that there may be strong demand for such targeted services and products.

Lloyds are trialing this new mortgage in branches at Edgware Road in London, Temple Row and Saltley in Birmingham, George Street and Leagrave in Luton.
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