Example of Conventional Mortgage
The property price is £100,000. The bank will be looking for a 10% deposit, with a mortgage period of 30 years, on £90,000 with an annual interest rate of 8%.
The buyer will pay £1000 stamp duty on purchasing the property.
The monthly repayment figure would be £660.39. Each payment makes up some of the interest due and some of the capital borrowed.
The buyer will make 360 monthly payments in total.
The total cost borrowed will be approximately £237,740.40.
This figure includes the amount of £147,740.40, which is the interest paid on the £90,000 borrowed.
Islamic and conventional mortgages compared
