About lender
Manzil is a financial service provider in Canada offering Halal financing and investing solutions that align with Islamic beliefs and ethical principles.
Manzil offers Halal mortgages, Halal credit cards, Halal investments, etc. Shariah-compliance experts have reviewed all products; Manzil is Canada’s first Associate member of AAOIFI (Accounting and auditing organization for Islamic financial institutions).
The company was established in Toronto in 2017 to give the Muslim (and even non-Muslim) community the opportunity to demolish usury and live «putting God first, before people, and people before profit.»
It's operating in Ontario province.
Features
Manzil offers Murabaha and Musharaka mortgages. The source of financing is the Halal mortgage fund, invested by any eligible individual or institution to receive monthly income disbursements.
Murabaha is a financing structure that allows the seller and buyer to agree to the cost and the fixed rate over a fixed term upfront. Manzil buys the property from a seller and sells it to the final buyer — the client — at «cost plus profit.»
It is Halal as it relates to a sale transaction, not interest, forbidden by Islamic law. Murabaha is not an interest-bearing loan (riba). There aren't any other charges, only the outstanding principal balance to pay off.
The mortgage is discharged once you pay off the price. When the mortgage is terminated, you fully own your home.
Musharaka is a certified Halal joint partnership agreement in which parties share benefits and losses. With the Musharaka mortgage, you can buy a new property, transfer, or refinance your existing mortgage from another financial institution.
Manzil Musharaka Mortgage allows Manzil and you to sign a Partnership Agreement to purchase the desired property and own shares according to your capital participation.
Manzil sells parts of its share in the property to you for an agreed price (which may vary). When you make regular payments, Manzil’s share in the home steadily decreases until you become the single owner.
You have the title on the property but hold Manzil’s beneficial ownership on trust until you close the mortgage.
Also, you can open a Halal prepaid credit card; no interest is charged or paid, and no subscription fees.
Manzil’s relationship with the customer is a seller-to-buyer relationship — with respect and not a lender or a borrower — as it is in conventional lending.
Pros and cons
Look through this pros and cons review to decide whether Manzil products are your best mortgage solution.
Pros
Shariah-compliant business, the service is appropriate for the Muslim community
Flexible and affordable repayment terms of 1 — 25 years
Fixed rates or rates based on the Bank of Canada rate
Transparent contracts
Easy and convenient to apply
No prepayment or late payment fee
Overview of the drawbacks you should know before borrowing.
Cons
A down payment of 20% minimum is required
The Halal mortgage fund limits funds
Operating only in Ontario
There are advantages and disadvantages of Manzil's financial services, but Manzil is one of the few options for the borrowers who want a deal compliant with Shariah law.
Loan conditions
Manzil provides an open fixed-rate Murabaha mortgage with terms from 1 to 25 years, Murabaha or Musharaka. Your payment amount doesn't change within the repayment terms. The price of purchase is up to $5,000,000 ($4,000,000 loan, $1,000,000 down payment).
You could repay monthly, on the first of each month.
Manzil purchases your desirable home from its seller and sells it to you for a price that includes Manzil’s profit, as a traditional mortgage is haram in Islam.
Profit rates are based on the following terms:
25 years — 5.49%
20 years — 4.99%
15 years — 4.49%
Ten years — 3.99%
Five years or less — 3.49%
With a Musharaka mortgage, you buy Manzil's shares of your home until you are the sole owner.
The Musharaka profit is a variable based on the Bank of Canada policy rate.
There are no prepayment penalties or late payment fees, but a down payment of a minimum of 20% is required. In addition, an administration fee of 2% of the financing amount will be charged at the time of closing.
Musharaka mortgage requires: if the property is sold to a third party, the company will forgo the right to any additional profit generated from such sale and will give the share of such gain to you 100%. But losses will be shared proportionate to each partner’s percentage of ownership.