What is riba?

What riba means

The root means increase, excess or growth. Classical jurists used the word for two distinct things, and the distinction still shapes how Islamic home finance is built.

Riba al-nasiah, the increase for delay

Extra owed because money was lent, or because a payment was deferred. Interest on a loan is the standard case. This is the riba that a mortgage raises, and the one every Islamic home finance structure is designed around.

Riba al-fadl, the increase in exchange

Swapping unequal quantities of the same kind of commodity on the spot. The reported teaching names six goods, including gold, silver and dates, and requires equal weight and immediate exchange when like is traded for like. It matters less to home finance, but it is why Islamic contracts are careful about what is being exchanged for what.

Sources: the six-commodities report in Sahih Muslim 1587; the two-type classification is set out in the standard reference works and in the encyclopaedia entry we read on 9 October 2026.

What the Quran says about riba

Four passages address it, and Muslim scholarship reads them as progressively firmer. The earliest, in Surah ar-Rum (30:39), contrasts wealth given as riba with wealth given as charity. Surah an-Nisa (4:161) records the prohibition as one already given to earlier communities. Surah Al Imran (3:130) tells believers not to consume riba "doubled and multiplied". The fullest treatment is Surah al-Baqarah (2:275 to 2:280), which states that trade is permitted and riba forbidden, tells believers to give up what remains of it, and instructs a lender to take back only the principal.

The reported teaching of the Prophet adds two things the jurists lean on: that riba is grave, with the payer, the receiver, the scribe and the witnesses all named in one report, and the six-commodity rule above.

Sources: Quran 2:275 to 2:280, 3:130, 4:161, 30:39; Sahih Muslim 1598. Read 9 October 2026. Translations vary in wording; the references are given so you can read them in the translation you use.

Is riba the same as interest?

On the position held by the international standards bodies, and by the scholars who certify UK Islamic home finance, yes: any increase on a loan is riba, whether the rate is high or low, and whether the lender is a person or a bank. That is the position the whole Islamic finance industry is built on, and it is why UK providers do not offer a cheaper loan with a lower rate. They offer a different contract.

Two narrower readings have been argued by a minority of scholars. One holds that the prohibition targets exploitative or compounding interest rather than every increase. Another holds that interest up to the rate of inflation compensates the lender for lost value rather than enriching them. Neither reading is adopted by the certifiers of any UK product we track, and none of the thirteen propositions in our register relies on it.

Where scholars differ

The prohibition itself is not in dispute among the schools. The disagreements are about what modern products do with it, and three of them bear directly on a UK reader.

Form against substance

A home purchase plan's rent is set against the same benchmarks a bank uses for interest, and its monthly payment can look identical to a mortgage payment. Some scholars have argued that a contract which replicates a loan's economics is a loan by another name, and that changing the label does not remove the riba. The standards bodies answer that the contract, not the price, is what the law regulates: a sale at a marked-up price and a lease at a market rent are both permitted, and pricing them by reference to a market rate does not turn them into loans. The AMJA Resident Fatwa Committee review of home finance companies in the United States shows the argument being applied to real contracts: it sorted eight companies into those whose contracts complied, those that avoided explicit interest but needed correction, and those whose contracts it found to be interest-based loans in another form. It examined no UK provider.

Commodity murabaha

Three of the propositions we track raise the finance through a commodity trade, called tawarruq, rather than through a sale or lease of the home itself. Standards bodies have accepted classical tawarruq between unconnected parties and have been more critical of the organised form banks use, where the bank arranges both legs of the trade. How the trade works, which UK providers use it and the Fiqh Academy's resolution on it are on our murabaha page.

Necessity

Some scholars, writing for Muslims in countries with no Islamic finance option, have argued that a conventional mortgage for a primary home may be permitted on grounds of necessity. It is a minority position, it is tied to the absence of an alternative, and no UK provider's certification rests on it. The certifications rest on the contracts avoiding an interest-bearing loan in the first place.

We report these positions because a reader deciding on religious grounds is entitled to know the range. Weighing them is a question for a scholar you trust, not for a comparison site.

What avoiding riba costs

Avoiding an interest-bearing loan does not make home finance cheaper, and in the UK it has usually cost more. We measured the published rental rates against the Bank of England's quoted-rate series for conventional mortgages, at the deposit tiers where a like-for-like comparison exists, and set out the result with its dates on the cost comparison page. The calculator prices the current products on your own figures, with the fees included.

What we could not verify

We hold published Sharia certificates for 2 of the 13 propositions in the register, and a stated certification without a document we could locate for 1 more, all among the mainstream home purchase plans; the table records the others' structure as they state it and nothing more. We have not read a certifier's reasoning on the pricing clause of any UK product, and have not yet put the form-against-substance question to any provider. When we do, the reply or its absence goes on the change log.

Who certified each product How the monthly payment is made up All terms explained

Common questions about riba

What is riba in Islamic finance?

Riba is the increase that Islamic law forbids in two settings: an extra amount charged for lending money or for deferring a debt, called riba al-nasiah, and an unequal exchange of the same kind of commodity, called riba al-fadl. In banking and home finance the word almost always refers to the first: interest on a loan.

Is interest the same as riba?

The position held by the major standards bodies, and by the scholars who certify UK Islamic home finance, is that all interest on a loan is riba, at any rate. A smaller number of scholars have argued that only excessive interest is meant, or that interest up to inflation is compensation rather than gain. UK Islamic mortgage products are built on the first position.

Is a mortgage riba?

A conventional mortgage is a loan repaid with interest, and on the mainstream scholarly position that interest is riba. Islamic home finance products exist to finance a home without an interest-bearing loan: the provider buys the property, or a share of it, and you acquire it over time, paying rent or an agreed profit rather than interest.

What are the two types of riba?

Riba al-nasiah is the increase for delay: extra owed because money was lent or a payment was deferred. Riba al-fadl is the increase in exchange: swapping unequal amounts of the same commodity, such as one weight of dates for a larger weight, on the spot.

Is an Islamic mortgage riba-free?

The provider says so. For the three mainstream UK products a named certifier is stated to have assessed the product as Sharia-compliant, and 2 of them publish the certificate itself. Some scholars have questioned whether products priced against interest-rate benchmarks avoid riba in substance as well as in form. We report both positions and the certificates. We do not rule.