Canada: Alberta province introduces law to allow halal mortgages

The Alberta government has introduced new legislation allowing provincial banks to offer mortgages consistent with Islamic finance. These “halal mortgage loans” aim to meet the needs of Muslims, for whom paying interest is strictly prohibited by Islam, making traditional loans inaccessible.

This legislation will allow credit unions and ATB Financial (a financial institution owned by the Province of Alberta) to offer interest-free home financing options, although banks are not required to adopt these products. Alberta Finance Minister Nate Horner said these financial institutions will now be able to develop products adapted to the growing demand of the industry.

Halal mortgages include various models, such as a system where the bank buys the property and charges monthly payments with a profit margin, until the customer owns the house. These new products could expand homeownership options for many Muslim Canadians.

By introducing this legislation, Alberta is taking a step toward greater financial inclusion, meeting the specific needs of the Muslim community. By offering real estate financing options consistent with Islamic finance, the province is paving the way for increased housing accessibility, while recognizing the diversity of religious practices in Canada.

If these products meet with the expected success, they could inspire other provinces to adopt similar measures, in order to promote a more inclusive economy that respects everyone’s beliefs.