AAP FactCheck has debunked a claim spreading online that National Australia Bank (NAB) offers interest-free home loans exclusively to Muslim customers.
The claim originated in an Instagram video from an account AAP FactCheck says it has previously debunked, alleging Muslim customers could access home loans without paying interest under Sharia law.
AAP FactCheck's investigation found the claim conflated NAB's Islamic business finance offering with home lending.
"The claim that NAB offers Islamic-compliant, interest-free home loans exclusively for a particular group of customers is incorrect," an NAB spokesperson told AAP FactCheck. "The offering in question is for business customers and is not a retail home loan product."
NAB's Islamic finance page states the product is for business customers seeking a minimum of $3 million to buy or build commercial property, land, equipment, or livestock, but has no equivalent product for owner-occupier or investor home loans, and is open to eligible customers of any religion or background.
The distinction between business and home lending reflects how Islamic finance is structured more broadly. Islamic banking expert Muhammad Safiullah of RMIT University told AAP FactCheck that Sharia-compliant lending avoids interest by structuring returns differently.
"Instead of providing interest-based loans, Islamic banks use Shariah-compliant financing structures, such as partnerships, joint ventures, and leasing arrangements," he said.
Borrowers still pay a cost under these structures, typically through an increased principal value rather than a stated interest rate. Safiullah noted that Islamic home loans, where they exist in Australia, are offered by specialist providers rather than the major banks.
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