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A halal mortgage is a Sharia-compliant home-financing structure — such as murabaha (cost-plus sale), ijara (lease-to-own), or musharaka (co-ownership) — designed to avoid charging or paying interest (riba), as prohibited under Islamic law, offered in Canada by a small number of specialized providers.
Instead of lending money at interest, a halal-mortgage provider structures the deal as a transaction in the underlying property itself. In a murabaha structure, the provider buys the home and resells it to the client at a set price that includes a profit margin, paid off through fixed instalments. In an ijara structure, the client starts as a renter of a home held in trust and gradually becomes the owner through their payments; in a musharaka structure, the provider and client co-own the home and the client buys out the provider's share over time.
Providers active in Canada, including EQRAZ and Manzil, are members of AAOIFI, an international standards body for Islamic finance, and set their profit rates or lease payments with reference to prevailing market conditions, including the Bank of Canada's rate environment, so the economics land in a similar range to a conventional mortgage even though the legal structure is different. In fall 2025, Servus Credit Union launched Servus Halal in Alberta, described as the first provincially regulated halal mortgage offered through a Canadian credit union.
Distinct financing structures: murabaha, ijara, and musharaka are the main Sharia-compliant structures used in Canada, each avoiding interest in a different way while remaining economically comparable to a conventional mortgage.
A newer, smaller segment of the market: only a handful of specialized providers currently offer halal mortgages in Canada, and product availability, insured eligibility, and provincial licensing can vary by provider.
Credit union entry: Servus Credit Union's Servus Halal, launched in Alberta in fall 2025, was described as the first provincially regulated halal mortgage offered through a Canadian credit union.
Brokers remain provincially licensed as usual: arranging a halal-mortgage deal doesn't change a broker's or agent's normal provincial licensing obligations under FSRA, BCFSA, RECA, the AMF, or other provincial regulators.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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