Help me understand, in islamic banking, what will happen if the value of the house goes down after you bought it for 500k with a down payment of 100k and after a year the price goes down to 400k? I want to understand how the risk is shared between the bank and the buyer?
Islamic mortgage products are linked to the bank of England rates This doesn't mean that they're charging interest, it's just means they use the rate as a benchmark for pricing (as that's how the wider mortgage market does it too) savings accounts/deposits are used to facilitate mortgages so when the BoE rates move so does the profit rate on savings account
@@SohaibAshraf Jzk for your response. That makes sense. They way I understand it is that Islamic banks are competing not just with other Islamic banks, but also the conventional banks (since non-Muslims can still use Islamic banks). Therefore their rates have to be competitive in the market. Since conventional banks are linked to BoE rates, naturally so will Islamic banks.
@@whatisbilalupto4966 in Islam, profits can be negotiated, loss cannot be negotiated. If the worst was to happen and the insurer doesn’t pay, each party has to accept their ratio of loss according to their ownership % at that time. Unfortunately, islamic banks often impose their loss on the customer. So do high street banks. Regrettably, Islamic banks state that they partake in loss by taking credit risk in the person. This is impermissible. The risk-sharing must be in the product not a person.
Your speaking speed seems to be 1.4x, good content but due to speed..I have to reduce the speed to .75x. Presentation with slow speed is good for a mid aged guy
Wrong. “Islamic banks” require you to get insurance. In both cases a default work the same way. We need to change our model to allow interest on primary residence if and only if it is within a range.
Help me understand, in islamic banking, what will happen if the value of the house goes down after you bought it for 500k with a down payment of 100k and after a year the price goes down to 400k?
I want to understand how the risk is shared between the bank and the buyer?
Yours will be 80k
Good video. Please can you explain why Islamic savings accounts like AlRayan and Gatehouse offer rates that closely follow Bank of England base rates?
Islamic mortgage products are linked to the bank of England rates
This doesn't mean that they're charging interest, it's just means they use the rate as a benchmark for pricing (as that's how the wider mortgage market does it too)
savings accounts/deposits are used to facilitate mortgages so when the BoE rates move so does the profit rate on savings account
@@SohaibAshraf Jzk for your response. That makes sense.
They way I understand it is that Islamic banks are competing not just with other Islamic banks, but also the conventional banks (since non-Muslims can still use Islamic banks).
Therefore their rates have to be competitive in the market. Since conventional banks are linked to BoE rates, naturally so will Islamic banks.
What if someone loses the house due to natural calamity? Or a business runs in a loss. Will Islamic Bank recover it or let go?
@@whatisbilalupto4966 in Islam, profits can be negotiated, loss cannot be negotiated. If the worst was to happen and the insurer doesn’t pay, each party has to accept their ratio of loss according to their ownership % at that time. Unfortunately, islamic banks often impose their loss on the customer. So do high street banks.
Regrettably, Islamic banks state that they partake in loss by taking credit risk in the person. This is impermissible. The risk-sharing must be in the product not a person.
@@whatisbilalupto4966 Islamic banks are not charities, they'll take the house.
May Allah bless you alhi
Ameen thank you brother
Your speaking speed seems to be 1.4x, good content but due to speed..I have to reduce the speed to .75x.
Presentation with slow speed is good for a mid aged guy
😂 appreciate the feedback - will keep in mind
You can’t tell a Scottish lad to speak slowly
Wrong. “Islamic banks” require you to get insurance. In both cases a default work the same way. We need to change our model to allow interest on primary residence if and only if it is within a range.
I mentioned the insurance in the video
@@SohaibAshraf If you have to pay for insurance how is the bank taking the risk?
You are speaking too fast and presenting very poorly.
not really, its a moderate pace. And the brothers presenting was good, I understood everything.
th-cam.com/users/liveXyy_Cz93lIc?si=91W-k36h7hswtHMN