Waleed, how does your example of an Islamic "mortgage" differ in principle from the standard mortgage arrangement? In my case, my bank has in effect bought my house and is selling it back to me on a deferred basis with the interest as its profit. While the house is in my name, in practice the bank is the beneficial owner until I have completed my deferred purchase and the lien on the property in favour of the bank is dissolved.

It sounds to me that you are simply renaming participants in the deal and elements thereof rather than making a fundamental change. What am I missing?

Mr Aly

Awaiting your reply to SimonM's post.