Zakat on Home Loan
The question of whether home loans and mortgage debt reduce zakatable wealth creates enormous confusion among Muslims worldwide. When you have a mortgage of 200,000, 300,000, or 500,000 outstanding on your house, and you also have 20,000 or 30,000 in savings and investments, must you calculate Zakat on the full savings amount or can you deduct the massive mortgage debt first? Does your monthly mortgage payment affect Zakat calculation? Is there a difference between Islamic home financing and conventional mortgage for Zakat purposes? What about home equity loans, refinancing debt, or paying off large portions of principal in one year? This comprehensive guide addresses every aspect of Zakat on home loan with complete clarity backed by authentic Islamic scholarship.
The critical truth about Zakat on home loan is this: Islamic scholars hold two distinct positions on whether mortgage debt reduces zakatable wealth. The majority position from Hanafi, Shafi, and many Hanbali scholars states that long-term installment debt like home loans does NOT reduce your zakatable wealth, meaning you calculate Zakat on your full savings regardless of mortgage size. The minority position from Maliki scholars and some Hanbali scholars allows deduction of all debts including mortgages from zakatable wealth before calculating Zakat. This guide explains both positions with complete evidence, helps you understand which view to follow, demonstrates exactly how to calculate Zakat on home loan under each position, and provides detailed examples for every mortgage situation.
Two valid scholarly positions on Zakat and home loan debt
Unlike many Zakat questions with clear consensus, the treatment of long-term debt like home loans and mortgages is an area where respected Islamic scholars across all four schools of jurisprudence hold legitimately different positions. This is not a matter of one position being correct and the other incorrect. Both views are derived from authentic Islamic sources and have been held by scholars for over a thousand years. Understanding both positions helps you make an informed choice about which view to follow for your Zakat on home loan calculation.
Majority Position
Mortgage debt does NOT reduce zakatable wealth
Hanafi school, Shafi school, and many Hanbali scholars hold that long-term installment debt like home loans does not reduce zakatable wealth. Under this view, you calculate Zakat on all your cash, savings, investments, and gold without deducting your mortgage balance. The reasoning is that Zakat is on wealth actually in your possession right now, and your mortgage debt does not diminish the cash sitting in your bank account today. This position allows deduction only for immediate debts due and payable within the current Zakat year.
Most contemporary Islamic scholars and organizations recommend this majority position for mortgage debt, including major fatwa councils in Saudi Arabia, Egypt, and the Islamic Fiqh Academy. This is the position you will find in most modern Zakat calculation tools and guides.
Minority Position
Mortgage debt DOES reduce zakatable wealth
Maliki school and some Hanbali scholars allow deduction of all debts including long-term mortgage debt from zakatable wealth before calculating Zakat. Under this view, if you owe 250,000 on your home loan and have 30,000 in savings, your net zakatable wealth is zero because debt exceeds assets. The reasoning is that debt represents a claim on your wealth, and you do not truly own wealth that you must use to pay creditors. This position treats all legitimate debts equally regardless of timeline.
Some contemporary scholars allow Muslims to choose this position if it causes genuine hardship to pay Zakat without considering mortgage debt, though they often encourage following the majority view when financially feasible.
Core Understanding
What home loan debt actually represents for Zakat
Understanding the nature of mortgage debt clarifies why scholars disagree on its treatment.
Home loan is a liability secured by your house
When discussing Zakat on home loan, you must first understand what a mortgage actually is in Islamic legal terms. A home loan or mortgage is a debt obligation where you borrowed money to purchase a house, and the lender holds a security interest in that house until you repay the loan. Whether structured as conventional mortgage with interest or Islamic financing through diminishing musharakah or ijara, the core reality is the same: you owe a specific amount of money that you are paying back over time, typically 15 to 30 years, through monthly installments.
Your mortgage debt and your house are two separate items in Islamic wealth calculation. The house you live in is not zakatable property under any scholarly position because it is for personal use, not investment. The mortgage debt is a liability you owe. The question for Zakat on home loan is whether this liability reduces your other zakatable assets like cash in bank accounts, savings, investments, and gold. Your house value and your home equity (house value minus mortgage) are completely irrelevant to Zakat calculation.
Why scholars disagree on mortgage debt deduction
The scholarly disagreement on Zakat and home loan stems from different understandings of what constitutes true wealth ownership in Islam. Majority position scholars argue that Zakat is calculated on wealth physically in your possession at this moment. Your 25,000 in savings is real money you can access today, and the fact that you owe 200,000 on a mortgage payable over 25 years does not change the reality that you possess this 25,000 right now. Minority position scholars argue that you do not truly own wealth when you have debt obligations because that wealth is effectively pledged to creditors. If you must eventually pay 200,000 to the bank, then you do not truly own the full 25,000 in savings. Both arguments have merit, which is why both positions are considered valid in Islamic jurisprudence.
Monthly payment is not the relevant figure for Zakat
Many Muslims ask whether they can deduct their monthly mortgage payment from zakatable wealth when calculating Zakat on home loan. This question misunderstands the issue. Your monthly payment of 1,500 or 2,000 or 3,000 is simply an expense you pay from your income each month, like rent would be if you did not own a home. The Zakat question concerns whether the total outstanding mortgage balance reduces your zakatable wealth, not whether monthly payments do.
On your Zakat date, you calculate Zakat on wealth you possess at that specific moment. If your bank account has 18,000 today, that is your zakatable cash regardless of the fact that you will pay 2,000 for your mortgage in two weeks. Your upcoming expense obligations do not reduce today's wealth calculation. This principle applies under both majority and minority scholarly positions. The difference between the positions is whether your total mortgage balance of perhaps 180,000 reduces your 18,000 in current wealth, not whether your 2,000 monthly payment does.
Calculate with both approaches
See your Zakat amount under majority and minority positions
Our calculator shows both calculations so you can choose which scholarly position to follow.
Calculate Your Zakat →Majority Scholarly View
How to calculate Zakat on home loan under majority position
Step by step application of the view that mortgage debt does not reduce zakatable wealth.
Calculate Zakat on full wealth ignoring mortgage balance
Under the majority scholarly position for Zakat on home loan, you completely ignore your mortgage balance when calculating Zakat. On your annual Zakat date, you total all your zakatable assets: cash in bank accounts, savings accounts, money market funds, accessible investment accounts, stocks, mutual funds, cryptocurrency, gold and silver beyond personal use, and any business assets if applicable. You compare this total to nisab. If your wealth exceeds nisab and remained above nisab for one complete lunar year, you calculate 2.5 percent Zakat on the full amount without any deduction for your home loan balance.
This calculation method is straightforward and eliminates complexity. You do not need to track your mortgage paydown throughout the year, do not need current mortgage statements showing outstanding balance, and do not need to consider loan terms or repayment schedules. Your home loan is simply not part of the Zakat calculation at all. Learn more about calculating total zakatable wealth in our comprehensive Cash and Savings guide.
Reasoning behind the majority position
The majority position that mortgage debt does not reduce zakatable wealth is based on several Islamic legal principles. First, Zakat is on wealth in your actual possession and control right now. The cash in your bank account is unquestionably in your possession today, and your mortgage obligation does not change that fact. Second, your mortgage is a long-term liability with installments spread over decades. You do not owe the full balance immediately today. Islamic law distinguishes between immediate debts due now versus future obligations payable over time. Third, allowing deduction of massive mortgage debt would exempt most homeowners from Zakat entirely, contradicting the purpose of Zakat as wealth redistribution. These scholars argue that someone with substantial savings should pay Zakat even if they also have substantial long-term debt.
What debts CAN be deducted under majority position
While the majority position does not allow mortgage debt deduction for Zakat on home loan purposes, it does allow deduction of immediate debts that are due and payable within the current year. If you borrowed 5,000 from family to cover an emergency and must repay it within six months, this immediate debt can reduce your zakatable wealth under the majority view. Similarly, credit card balances that you must pay within the billing cycle, personal loans due within the year, and business debts payable to suppliers immediately are all deductible because they represent claims on your current wealth.
The distinction is between immediate claims on your wealth today versus long-term payment obligations extending years into the future. Your mortgage falls in the second category, making it non-deductible under majority position. However, if you have other immediate debts alongside your mortgage, those can still reduce your zakatable wealth even though the mortgage cannot. Learn more about different debt types in our Does Debt Reduce Zakat guide.
Minority Scholarly View
How to calculate Zakat on home loan under minority position
Step by step application of the view that mortgage debt does reduce zakatable wealth.
Deduct current mortgage balance from zakatable wealth
Under the minority scholarly position for Zakat on home loan, you deduct your outstanding mortgage balance from your zakatable wealth before calculating Zakat. On your Zakat date, you first total all zakatable assets exactly as described in the majority position: cash, savings, investments, gold, business assets. You then obtain your current mortgage balance from your latest loan statement. You subtract the mortgage balance from your total zakatable assets. If the result is above nisab, you calculate 2.5 percent Zakat on this net amount. If your mortgage exceeds your assets, your net zakatable wealth is zero and no Zakat is due.
This method requires you to know your exact mortgage balance on your Zakat date. If your Zakat date is 1st Ramadan and your last mortgage statement was from two months prior, you need to calculate how much principal you paid down in the intervening months to determine current balance. Most online mortgage accounts show current balance at any time, making this straightforward. You deduct only the principal balance you owe, not any future interest that has not yet accrued.
Reasoning behind the minority position
The minority position allowing mortgage debt deduction is based on the principle that debt represents a claim on your wealth that reduces what you truly own. If you have 30,000 in savings but owe 250,000 on your home loan, these scholars argue you do not truly possess 30,000 in wealth because you are obligated to pay 250,000 eventually. The money in your account is effectively pledged to future mortgage payments. They cite hadiths where the Prophet ﷺ indicated that debt should be paid before calculating what wealth remains subject to Zakat. They argue this applies to all legitimate debts, not just immediate ones, because all debt represents claims on your wealth regardless of payment timeline.
When minority position may be appropriate to follow
Some contemporary scholars suggest that while the majority position is generally recommended, Muslims facing genuine financial hardship may follow the minority position for Zakat on home loan. If paying Zakat on your full savings would create difficulty meeting basic family needs or mortgage payments, consulting a knowledgeable scholar about following the minority view may be appropriate. However, this should be done with proper Islamic guidance, not simply choosing whichever position results in lower Zakat as a matter of convenience.
Once you choose a scholarly position to follow for Zakat on home loan, consistency is important. Switching between positions year to year based on which gives lower Zakat amounts undermines the sincerity of following Islamic scholarship. Choose the position that aligns with your understanding and circumstances, then apply it consistently each year. If you follow minority position and later pay off your mortgage, you would then calculate Zakat on full wealth going forward since the debt no longer exists.
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Calculate Now →Financing Structure
Islamic mortgage versus conventional mortgage for Zakat
How different home financing structures affect Zakat on home loan calculation.
Both financing types treated the same for Zakat purposes
Many Muslims wonder whether Islamic home financing structures like diminishing musharakah, ijara wa iqtina, or murabaha are treated differently than conventional interest-based mortgages for Zakat on home loan calculation. The answer is that for Zakat purposes, the debt deduction question is the same regardless of financing structure. Whether you have halal Islamic financing or conventional mortgage with interest, the scholarly disagreement about whether the debt reduces zakatable wealth applies identically to both.
Under majority position, neither Islamic financing debt nor conventional mortgage debt reduces your zakatable wealth. Under minority position, both Islamic financing debt and conventional mortgage debt can be deducted from zakatable wealth. The financing structure affects the permissibility and halal status of your home purchase method, which is a separate Islamic question from how to calculate Zakat on the resulting debt. For Zakat on home loan purposes, focus on the debt deduction principles, not on the financing contract structure.
How Islamic financing structures work
Islamic home financing avoids interest through various contract structures. Diminishing musharakah involves the bank and customer jointly purchasing the property, with the customer gradually buying out the bank's share through monthly payments. Ijara wa iqtina structures it as a lease-to-own arrangement. Murabaha involves the bank purchasing the property and selling it to you at a profit with deferred payment. Despite these structural differences, all result in you owing a specific amount that you pay over time through installments, which is why Zakat treatment is the same as conventional mortgage.
Deduct current obligation amount on Zakat date
If you follow the minority position allowing debt deduction for Zakat on home loan, the amount you deduct for Islamic financing is your current outstanding obligation shown on your financing statement. For diminishing musharakah, this would be the bank's remaining ownership share that you must still purchase. For murabaha, it would be the remaining deferred sale price you owe. For ijara, it would be the remaining lease-to-own obligation. Check your latest statement from your Islamic financing provider to find this current balance figure.
Do not deduct future profit amounts that have not yet accrued, just as you would not deduct future interest on conventional mortgage. The deductible amount under minority view is always the current principal obligation you owe today, not future costs or fees. This keeps the calculation consistent across all home financing types when calculating Zakat on home loan.
Real Situations
Detailed examples of Zakat on home loan calculations
Step by step walkthroughs showing both scholarly positions applied to common mortgage scenarios.
Young couple with large mortgage and modest savings
Background: Ahmad and Fatima purchased their first home two years ago. They have a 280,000 conventional mortgage with 25 years remaining. They have been accumulating savings for emergencies but the mortgage is much larger than their assets. Their Zakat date is 1st Ramadan.
Assets on Zakat date: Joint checking account: 8,400. Individual savings account (Ahmad): 6,200. Individual savings account (Fatima): 5,800. Emergency fund money market: 4,600. Gold jewelry beyond personal use: 2,200. Total zakatable assets: 27,200.
Mortgage balance: Current outstanding principal: 276,450.
Majority position calculation: Total assets 27,200 compared to nisab of approximately 400 based on silver. Assets far exceed nisab and remained above for full year. Mortgage balance is ignored. Zakat due: 27,200 times 0.025 equals 680.
Minority position calculation: Total assets 27,200 minus mortgage 276,450 equals negative 249,250. Net zakatable wealth is zero. No Zakat is due because debt exceeds assets.
Key insight about Zakat on home loan: This demonstrates the massive difference between positions for people with large mortgages. Under majority view, they owe 680 Zakat. Under minority view, they owe nothing. Both are valid Islamic positions. They should choose one based on scholarly guidance and their circumstances, then apply consistently.
Established family with partially paid mortgage
Background: Umar has owned his home for 12 years with original 300,000 mortgage. He has been paying it down while also building substantial savings and investments. He follows the majority position that mortgages do not reduce Zakat.
Assets on Zakat date: Bank accounts total: 45,800. Investment account: 68,200. Retirement account (accessible): 92,000. Gold and silver: 8,400. Total zakatable wealth: 214,400.
Mortgage balance: Remaining principal after 12 years of payments: 164,200.
Calculation following majority position: Nisab is 400. Total wealth 214,400 far exceeds nisab and remained above for full year. Mortgage is not deducted. Zakat: 214,400 times 0.025 equals 5,360.
What if he followed minority position: Total wealth 214,400 minus mortgage 164,200 equals net wealth 50,200. Zakat would be: 50,200 times 0.025 equals 1,255.
Key insight about Zakat on home loan: Even with a large remaining mortgage, Umar has substantial net wealth under minority view because his assets exceed the mortgage balance. The difference between 5,360 and 1,255 is significant, showing how scholarly position choice matters greatly. Learn more about calculating investment wealth in our Investments guide.
Home equity loan on top of primary mortgage
Background: Aisha owns a home with original mortgage plus took a home equity loan three years ago to renovate the kitchen and add a bathroom. She wants to understand how both debts affect Zakat on home loan calculation.
Assets: Savings accounts: 22,400. Investment in stocks: 18,600. Cash: 1,200. Cryptocurrency: 5,800. Total: 48,000.
Debts: Primary mortgage balance: 185,000. Home equity loan balance: 32,000. Total home debt: 217,000.
Majority position: Calculate Zakat on full 48,000 without deducting either the primary mortgage or home equity loan. Both are long-term installment debts not deductible under majority view. Zakat: 48,000 times 0.025 equals 1,200.
Minority position: Assets 48,000 minus total debt 217,000 equals negative 169,000. No Zakat is due because debts exceed assets. Both the primary mortgage and home equity loan are deductible under minority view since both represent legitimate debt obligations.
Key insight about Zakat on home loan: Home equity loans and second mortgages are treated identically to primary mortgages. If one is deductible under your chosen position, so is the other. If one is not deductible, neither is the other. Learn more about crypto assets in our Crypto guide.
Islamic financing with large prepayment during the year
Background: Bilal has Islamic home financing through diminishing musharakah. He received a large bonus and paid 40,000 toward principal to reduce his financing obligation. He wants to know how this affects Zakat calculation.
Before bonus and prepayment: Total savings and investments: 85,000. Islamic financing balance: 225,000. He used 40,000 from savings to pay down financing.
On Zakat date after prepayment: Remaining savings and investments: 45,000 (85,000 minus 40,000 used). Islamic financing balance: 185,000 (225,000 minus 40,000 paid).
Majority position calculation: Current wealth 45,000 exceeds nisab. Financing balance is ignored. Zakat: 45,000 times 0.025 equals 1,125. The prepayment automatically reduced his zakatable wealth from 85,000 to 45,000 because he spent that money. No special debt deduction needed.
Minority position calculation: Wealth 45,000 minus financing 185,000 equals negative 140,000. No Zakat due. The prepayment reduced both his wealth and his debt proportionally.
Key insight about Zakat on home loan: When you pay down mortgage or financing principal, your cash wealth decreases by that amount automatically. This reduces Zakat under majority view even though the mortgage itself is not deducted. Under minority view, both your wealth and debt decrease, so the net effect depends on your specific numbers.
Refinanced mortgage with cash-out
Background: Omar refinanced his mortgage last year, taking cash out to invest in his business. He now has a larger mortgage balance than before but also increased business assets. He follows minority position allowing debt deduction.
Assets on Zakat date: Personal savings: 18,500. Business account: 42,000. Business inventory value: 28,000. Gold: 3,800. Total: 92,300.
Mortgage after refinance: New mortgage balance: 295,000 (original 180,000 plus 115,000 cash-out used for business).
Calculation under minority position: Total assets 92,300 minus mortgage 295,000 equals negative 202,700. Despite having over 90,000 in assets, no Zakat is due because mortgage debt exceeds assets when following minority view that allows deduction.
If following majority position: Would owe Zakat on full 92,300: equals 2,307.50 Zakat, since mortgage is not deductible.
Key insight about Zakat on home loan: Refinancing and cash-out refinancing do not change the basic Zakat on home loan principles. Your current mortgage balance is what matters under minority view, regardless of the original loan amount or how you used refinance proceeds. Learn more about business assets in our Self Employed guide.
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Quran and Sahih Hadith on wealth, debt, and Zakat
Authentic textual sources underlying both scholarly positions on Zakat and home loan debt.
Quran
Take Zakat from their wealth
Quran 9:103
Allah commands taking Zakat from wealth to purify it. The verse uses the word wealth (amwal) which scholars define as assets in possession. This supports majority view that Zakat is on wealth you possess now, not net worth after debts.
Quran
Give Zakat of what you possess
Quran 2:43
Believers are commanded to give Zakat from what they possess. Both positions agree Zakat is on possessed wealth. Disagreement is whether debt reduces what you truly possess.
Quran
Rights of the needy in your wealth
Quran 51:19
Allah establishes that wealth of believers contains rights for the needy. This principle underlies Zakat obligation regardless of debt situations. Those with qualifying wealth must fulfill this right.
Quran
Purification through giving
Quran 9:71
Believers purify themselves through Zakat. The purification applies to wealth in possession. Whether mortgage debt affects this depends on defining what constitutes possessed wealth subject to purification.
Hadith
No Zakat until wealth completes one year
Sunan Abu Dawud 1573
The Prophet ﷺ taught that wealth must remain in possession for one complete year before Zakat is due. This establishes hawl requirement. Both positions agree on this principle for zakatable wealth.
Hadith
Debt should be paid from estate first
Sahih al-Bukhari 2753
The Prophet ﷺ indicated debts have priority claim on wealth. Minority position scholars use this to argue that debt reduces true ownership of wealth, making it deductible for Zakat purposes.
Hadith
Zakat on wealth in your possession
Sahih Muslim 979
The Prophet ﷺ clarified Zakat is on specific wealth types you possess. Majority position argues this means actual current possession, not theoretical ownership after accounting for future debt obligations.
Hadith
Give Zakat from your wealth
Sahih al-Bukhari 1395
The Prophet ﷺ explained Zakat as a right in wealth that must be given to the poor. Both scholarly positions agree on the obligation. They differ on whether long-term debt affects the wealth subject to this right.
Why both positions are considered valid in Islamic law
The existence of two positions on Zakat and home loan debt is not a flaw in Islamic scholarship but reflects the depth and flexibility of Islamic jurisprudence. The Quran and Hadith establish clear principles about Zakat being due on wealth, but they do not explicitly address modern long-term mortgage debt scenarios. Classical scholars therefore applied fundamental principles and derived rulings through ijtihad (scholarly reasoning). Different schools reached different conclusions based on how they understood wealth ownership when debt exists.
Majority position emphasizes the Quranic focus on wealth you possess (ma malakat aymanukum) and argues this means current possession regardless of future obligations. Minority position emphasizes hadiths about debt creating claims on wealth and argues true ownership is reduced by debt obligations. Both arguments use authentic sources and valid reasoning methodology. This is why contemporary scholars say you can follow either position based on your circumstances and understanding, as long as you apply it consistently and sincerely.
FAQ
Frequently asked questions about Zakat on home loan
Direct answers to the most common questions about mortgage debt and Zakat calculation.
Does a home loan reduce the amount of Zakat I have to pay?▾
This depends on scholarly position. The majority view (Hanafi, Shafi, some Hanbali scholars) is that long-term debt like home loans and mortgages do NOT reduce zakatable wealth. Under this view, you calculate Zakat on all your cash, savings, investments, and gold without deducting your mortgage balance. The minority view (Maliki, some Hanbali scholars) allows deduction of all debts including mortgages from zakatable wealth. Most contemporary scholars recommend the majority position for mortgage debt.
Can I deduct my monthly mortgage payment from my zakatable wealth?▾
No, you cannot deduct monthly mortgage payments from zakatable wealth under any scholarly position. The question is whether the total outstanding mortgage balance reduces zakatable wealth, not whether monthly installments do. Your monthly payment is an expense you choose to make from your income. On your Zakat date, you calculate Zakat on your current wealth regardless of upcoming monthly payment obligations.
Is there a difference between Islamic mortgage and conventional mortgage for Zakat?▾
For Zakat calculation purposes, most scholars treat both the same way regarding debt deduction. Whether your home loan is structured as halal Islamic financing (diminishing musharakah, ijara, murabaha) or conventional interest-based mortgage, the question of whether it reduces zakatable wealth depends on the same debt deduction principles. The financing structure affects permissibility, not Zakat calculation method.
What if I have a large mortgage and little savings - do I still pay Zakat?▾
Under the majority scholarly position, yes. If you have savings, investments, or cash above nisab for a full lunar year, Zakat is due regardless of mortgage size. Someone with a 200,000 mortgage and 15,000 in savings would calculate Zakat on the full 15,000 under majority view. Under minority view allowing debt deduction, the mortgage would eliminate the Zakat obligation since debt exceeds zakatable assets.
Does a home equity loan or second mortgage affect Zakat differently than the primary mortgage?▾
Home equity loans and second mortgages are treated the same as primary mortgages for Zakat purposes. Under majority view, they do not reduce zakatable wealth. Under minority view, they would be deductible like any other debt. The fact that the loan is secured against your home does not change the Zakat treatment compared to other long-term debt.
If I pay off a large portion of my mortgage in one year, does this affect my Zakat?▾
Yes, this affects your zakatable wealth regardless of scholarly position. If you paid 30,000 toward your mortgage principal this year, your current cash and savings are now 30,000 lower than they would have been. On your Zakat date, you calculate Zakat on whatever wealth remains in your possession. The mortgage paydown reduced your available wealth, which automatically reduces your Zakat amount without any special debt deduction calculation needed.
Should I include the value of my house itself in zakatable wealth?▾
No. Your primary residence is not zakatable under any scholarly position. Zakat is not due on the house you live in, regardless of its value. The question of Zakat on home loan concerns only whether the mortgage debt reduces your zakatable cash, savings, and investments. Your home equity (house value minus mortgage) is completely irrelevant to Zakat calculation.
What if my mortgage will be paid off in 2 years versus 25 years - does this matter?▾
Under the majority view that mortgages do not reduce zakatable wealth, the repayment timeline is irrelevant. Under the minority view that allows debt deduction, some scholars distinguish between immediate debts due within the year and long-term debts. However, most scholars applying the minority view allow deduction of all debt regardless of timeline, making your 2-year versus 25-year mortgage timeline irrelevant for Zakat purposes.
Can I deduct only the principal portion of my mortgage balance, not the future interest?▾
This question only applies if you follow the minority view allowing debt deduction. Under that view, you would deduct your current outstanding mortgage balance (the principal you owe now), not future interest that has not accrued yet. Your mortgage statement shows current balance - this is what would be deductible under minority view. Future interest payments are not yet owed and cannot be deducted.
What is the strongest Islamic evidence about whether home loans reduce Zakat?▾
The majority position that long-term debt does NOT reduce Zakat is based on the principle that Zakat is due on wealth in your actual possession, and your mortgage debt does not diminish the cash sitting in your bank account right now. The minority position allowing deduction is based on hadiths mentioning debt generally reduces what you truly own. Both positions have Islamic evidence, but the majority of classical and contemporary scholars apply the first view to long-term installment debt like mortgages while allowing deduction only for immediate debts due within the year.
Implementation
Practical guidance for Zakat on home loan calculation
How to choose a position, gather necessary information, and calculate accurately.
1. Decide which scholarly position to follow
Consult with a knowledgeable Islamic scholar about which position is appropriate for your situation. Consider your financial circumstances, the size of your mortgage relative to assets, and whether following one position would create genuine hardship. Once you choose a position for Zakat on home loan, commit to applying it consistently year after year rather than switching based on convenience.
2. Obtain current mortgage balance statement
If following the minority position that allows debt deduction, you need your exact current mortgage balance on your Zakat date. Log into your mortgage lender's online portal or check your most recent mortgage statement. Find the line showing current principal balance, not the monthly payment amount or original loan amount. This is the figure you would deduct from zakatable wealth.
3. Calculate total zakatable assets first
Regardless of which position you follow on debt deduction, start by calculating total zakatable wealth. Add up cash in all bank accounts, savings, money market funds, accessible investments, retirement accounts you can access, gold and silver beyond personal use, cryptocurrency, business assets, and any other wealth. Get complete totals before considering any debt deduction question.
4. Apply your chosen position consistently
If following majority position, calculate 2.5 percent Zakat on your total assets if above nisab. If following minority position, subtract mortgage balance from total assets first, then calculate 2.5 percent on the remainder if positive and above nisab. Use our Zakat calculator which handles both calculations.
5. Document your calculation method
Keep a simple record noting which scholarly position you followed for Zakat on home loan, your total assets, your mortgage balance if deducted, and the resulting Zakat amount paid. This helps you maintain consistency year over year and provides reference if you later consult a scholar with questions about your specific situation.
6. Reassess if circumstances change significantly
If you pay off your mortgage completely, refinance with a very different balance, or experience major financial changes, consult Islamic guidance again about whether your chosen position still applies. Major life changes may warrant reassessing which scholarly approach best fits your new circumstances.
The fundamental principle for Zakat on home loan
Whether you follow the majority position that mortgages do not reduce zakatable wealth or the minority position that they do, both approaches require you to calculate honestly and pay Zakat on qualifying wealth. The goal is not to minimize Zakat through technicalities but to fulfill your Islamic obligation according to sound scholarship. Choose the position that aligns with proper Islamic guidance for your situation, apply it with integrity, and remember that Zakat purifies your wealth and benefits those in need regardless of your mortgage status.
Ready to calculate
Calculate your Zakat with proper home loan treatment
Stop worrying about whether your mortgage reduces Zakat. Choose the scholarly position appropriate for your situation and calculate accurately. Our calculator supports both majority and minority positions, allowing you to see your Zakat obligation under each approach and make an informed decision based on Islamic guidance.
Related guides on debt and Zakat
Disclaimer: This guide provides general educational information about Zakat on home loan based on established positions from the four major schools of Islamic jurisprudence. The treatment of mortgage debt for Zakat purposes is an area of legitimate scholarly disagreement, with both majority and minority positions having authentic Islamic foundations. Individual circumstances vary significantly based on mortgage size, mortgage type (conventional vs Islamic financing), home equity loans, refinancing situations, other debts, total asset levels, income sources, family obligations, and financial hardship considerations. For questions about which scholarly position to follow in your specific situation, complex debt structures, mortgage refinancing with cash-out, reverse mortgages, interest-only loans, balloon payment mortgages, or any scenario where you are uncertain about proper Zakat treatment of home loan debt, consult qualified Islamic scholars who understand both Islamic financial jurisprudence and modern mortgage structures. This guide aims to help Muslims understand the scholarly positions and calculate Zakat on home loan correctly according to the position they choose to follow with proper Islamic guidance.
About this Content
Written by the Zakat Finance editorial team. All content is based on authentic Islamic scholarship and is reviewed regularly to ensure accuracy. The content aims to provide guidance on Zakat calculation and does not replace advice from a qualified Islamic scholar.
Last updated: February 2026
Method note: We present common scholarly approaches to Zakat calculation, encouraging consultation with trusted scholars for personal cases.