Mortgage

Wa ‘alaykum as-Salām wa raḥmatullāhi wa barakātuhu,

Dealing with interest (Ribā) is considered a major sin in Islam. Alḥamdulillāh, you have repented and intend to come out of this sin. Your intention to reduce monthly expenses by moving to a new house while maintaining the same loan amount is to ease your financial burden and enable you to pay off the loan faster. However, entering into a new mortgage with a conventional bank would still involve riba, which remains impermissible regardless of the intention behind it. Taking a new conventional mortgage would still involve Ribā, and thus, would be sinful. The objective of reducing expenses is understandable, but it does not change the nature of the transaction.

However, paying off your existing debt as quickly as possible to rid yourself of riba is commendable, and for this, you may consider the following alternative solutions:

• Personal Financing: Seek alternatives such as obtaining a loan from a friend or borrowing funds from a family member. You can use those funds to pay off your bank loan immediately and repay the creditor over a stipulated period with no additional interest.
• Refinancing with Islamic Banks: If available, you can refinance your existing mortgage through an Islamic bank to convert your riba-based loan into a Sharia-compliant one.
• Selling and Downsizing: Consider selling your current apartment and using the proceeds to buy a more affordable home without taking another loan or by minimizing the loan amount, preferably through Islamic financing if needed.

Given these points, taking a new conventional mortgage would not align with Islamic principles, despite your good intentions. Seeking a Sharī‘ah-compliant alternative would be more appropriate to align your financial actions with Islamic teachings and avoid further involvement in Ribā. Consulting a knowledgeable Islamic scholar or financial advisor who specializes in Islamic finance can provide more personalized guidance.

And Allah subhanahu wa ta’ala knows best.