The NAB is planning to introduce "Muslim-friendly" loans that do not charge interest.
"the Islamic ban on usury the mortgage often works by the bank buying the property, then selling it to the customer at a profit, with the customer then repaying the entire sum in instalments.
In this way the profit margin is built in from the start. It also has the advantage of making the loan immune from future interest rate rises."
See the article here from Nick Gardner and Warner Russell from the Sunday Telegraph
These loans are available to non-Muslims as well.
Is this a good way to lock in an interest rate ?
Can you see any downside ?
Are there any advantages?