I live in Australia. I took out a home loan through a bank which deals with interest. I can rent, but the loan repayments make it easier for me to buy then rent, as the rent is almost double the repayments. If I do sell my home to get rid of the interest and rent I will get extra money from when I bought my house due to increase in the value of the home. Is that increase Halal for me to keep, or is it Haram since it could have come from buying the house in interest in the first place? This question has many young men in Australia confused and not knowing what to do as our parents say that we are crazy to sell our homes and rent. What is the solution?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

Borrowing money with interest is Riba (interest and/or usury) itself and whoever did so has indeed committed a major sin. So, he must seek the forgiveness of Allaah and try to get closer to Him because of what he had done.

Now, he is obliged to give back only the capital money without any interest if he can. If he cannot do so and the creditor obliges him to pay back the loan along with the Riba, then he should pay the Riba and the lender of the money will bear the sin of taking the Riba.

On the other hand, selling the house which he had bought with this loan is not a condition of a true repentance. However, if he can settle the debt at once, then he should do so in order to get rid of Riba as soon as possible. Moreover, he can sell the house if he so wishes because the house is purchased with a contract other than the previous contract of Riba.

Allaah Knows best.