The funding is from the same source as a product launched through Argosy Finance last year. This was the first in New Zealand aimed at Muslims seeking funding to purchase property but unable to use conventional mortgages because payment of interest is not permitted by their religion.
Funds are being provided by a group of private investors and the basic design of the scheme, known as Manzil, is the same as Argosy’s.
When a customer chooses a property they apply for funding to cover up to 80% of the purchase price. The property is bought by a foundation and the customer pays a bond of at least 20%.
They receive a licence to occupy the property for 10 years and an option to buy. They pay a monthly licence fee and if they buy the house are entitled to keep 90% of the increase in value. The foundation keeps the remaining 10%. The final purchase price can be capped in return for a fee and the customer can reduce the licence fee by increasing the bond.
Views about the suitability of finance packages vary from one branch of Islam to another. The new scheme has a "fatwa" (Islamic legal opinion) issued by the Ulama Board of the Federation of Islamic Associations of New Zealand that acknowledges that "the (Manzil) package is the best available at the present time".
Tasman’s Manzil will be sold through brokers. The lender’s standard commission is 0.7% upfront and a trail commission of 0.15%, although this can vary.
