Lloyds to offer islamic account

[Wazza007]

Im not sure if this should be in this section or another?

Did others read this in the AFR?

http://afr.com/articles/2005/02/16/1108500106595.html

Just out of interest - I wouldnt try to pass myself of as a muslim so I could apply if thats what your all thinking

How do these loans work i.e.
Would you have to prove that you are a muslim as part of the application process?
My understanding is these loans hold/share part of the equity in the property?
Would these loans be more exspensive - application fees ongoing charges etc.
I wonder if any of the larger Aust banks would consider a similar product?

 

[quiggles]

That item was talking about savings accounts, rather than loans. I know several banks in Australia were working on Sharia compliant loans a couple of years back. My understanding was that there would be a very high fee structure which, while not interest, would allow the bank to profit from the loan.

Savings accounts might (I speculate) at least be able to operate as offset accounts against fees on loans?

 

[nat r]

The loans that I have seen of this nature either take an equity stake in the house i.e. they get a share of the profit at sale or the bank calculates the future value of the 'missed' interest payments and adds them to the total value of the loan which is then paid down in equal 'principal' installments.

There is no other way to structure a mortgage loan with no interest payments.

 

[Wazza007]

Aaah ok thanks for clearing that up, I thought there would have to be some disadvantage or offset i.e higher fees etc.