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CIFB is an independent Shariah body that oversees and audits financial products using Islamic principles. One of our products is the Halal Murabaha Mortgage that is offered by Servus Halal. Our role is to protect Shariah integrity from beginning to end, ensuring that every step of the process remains fully compliant and transparent.
Servus Halal is a subsidiary created by Servus Credit Union specifically to provide Halal financial products. Servus Halal launched in 2025 with the Halal Murabaha mortgage. This is the only product available at this time from Servus Halal.
Shariah Structure & Conceptual Framework
Murabaha is a Shariah-compliant home purchase method where a financial institution buys the property first, then sells it to you at a clearly disclosed cost-plus-profit price. That final price never changes, and you pay it over time through an agreed schedule. It is a trade-based sale, not a loan, and it avoids interest (Riba) entirely.
It is the contract between you (the home buyer) and Servus Halal regarding the sale of the property to you. The contract discloses the cost, including the profit amount that you are agreeing to purchase the house for. You then pay this fixed price in equal amounts every month, over the 25-year life of the contract. This structure avoids interest (Riba), and aligns with Islamic finance rules.
The profit amount may follow market benchmarks for competitiveness, but it remains a fixed trade profit structure — not interest-based.
The profit amount is based on a number of factors, including market benchmarks, and clearly defined in the contract. It is part of the total sale price and does not change over time.
Shariah Governance & Oversight (CIFB)
Yes, the Servus Halal Mortgage is a Murabaha structure and has received formal Shariah approval from the Canadian Islamic Finance Board (CIFB), an independent body of recognized scholars and Islamic finance experts. The product remains under continued supervision and periodic audit to safeguard compliance throughout its operation.
All disputes are addressed through Servus Halal’s formal complaint resolution process. Any matters related to Shariah compliance may also be independently reviewed (by CIFB) to ensure the product continues to adhere to Shariah principles.
CIFB verifies:
• correct sequence of steps
• proof of ownership transfer
• document and payment timelines
• proper training of staff handling Islamic finance contracts
Shariah audits are conducted annually, with additional reviews carried out as needed to ensure ongoing compliance.
Yes. If material Shariah violations or negligence are identified and are not remedied within a reasonable timeframe, CIFB reserves the right to suspend or revoke certification to preserve the integrity of Shariah compliance.
Any eligible Canadian resident who meets Servus Halal’s financial requirements can apply. The program is designed for clients who want a Shariah-compliant home purchase in Alberta.
No. Opening a checking or savings account or becoming a member of Servus Credit Union is not required to obtain a Servus Halal Mortgage. .
CIFB does not certify or review the products of Servus Credit Union; CIFB only exclusively certifies the Servus Halal Mortgage.
Application & Onboarding Process
Applicants can expect a structured, step-by-step process. This typically includes a mortgage pre-approval, property selection, Servus Halal’s purchase of the property, execution of the Murabaha sale agreement, and scheduled payments over the agreed term.
Each stage of the transaction, including pricing and contractual terms, is disclosed in advance to ensure transparency and informed decision-making.
To ensure you have the most up-to-date details, Servus Halal publishes information about the process at ServusHalal.ca.
Pre-approval means your basic financial information has been reviewed, and Servus Halal is prepared to offer you a mortgage up to a certain amount that you qualify for if all conditions are met. It is not the final contract.
The LOI is a preliminary commitment document and not the final Murabaha Sale Agreement.
It confirms that Servus Halal will purchase a particular property and outlines the terms and pricing for the customer to buy the property from Servus Halal through a Murabaha transaction in the future.
It is important to know that the customer is not bound to the transaction through this document. However, as part of the process, a purchase deposit is collected with the signing of the LOI and will be used to cover costs or expenses incurred to date, should the transaction fail for reasons within the customer's control.
Contract Formation & Legal Commitment
No. You may only sign the Murabaha contract after Servus Halal legally acquires the property. Signing early is a major violation of Islamic finance rules.
Islamic finance requires a real purchase and sale. If the buyer signs before the financier owns the asset, the financier would be selling something that they do not own, and this is prohibited in Islam.
You are legally committed to the purchase of the property after Servus Halal has taken possession of the home and you have electronically signed the Murabaha agreement provided by the lawyer.
. If you choose not to proceed with the transaction after Servus Halal has purchased the home, the terms of your Letter of Intent take effect and you will be responsible for covering any losses or damages that Servus Halal incurred as a result of that purchase.
Ownership, Title & Legal Structure
In a Murabaha arrangement,,the financier, Servus Halal places a lien in the form of a registered mortgage charge solely as security for the agreed payment plan. Once the final mortgage payment is made, the lien is released and the payment obligation ends.
A halal mortgage (Ar-Rahn Contract) is a Shariah-compliant financing arrangement in which a property is purchased or financed through a permissible contract, such as Murabaha (cost-plus-profit) while the property itself is placed as a rahn (collateral/lien) to secure the buyer’s payment obligations, without involving interest (Riba).
Once the Murabaha agreement is signed and the title is transferred, you become the legal owner of the property. At this point, Servus Halal holds collateral security for the mortgage payments that are due over the 25-year term of the contract.
A copy of the Murabaha agreement is included when the home purchase is registered with Alberta Land Titles.
Yes. The agreement is structured in accordance with Alberta real estate law and Canadian contract principles, and it follows the principles of Islamic finance. It complies with applicable provincial regulations governing property ownership, registration, and enforceability.
A number of legal experts around the province are trained and approved (including by CIFB) to handle Servus Halal Mortgage contracts. Customers may choose a lawyer from this approved list of vendors to finalize the contract.
Customers are welcome to seek additional independent legal advice; however, the transaction must be completed by one of the approved lawyers to ensure compliance.
Your mortgage payments are based on the fixed Murabaha sale price plus the disclosed profit amount) divided equally over the agreed 25-year term. The full payment schedule is shared with the home buyer when the Letter of Intent is signed (before Servus Halal purchases the property) so that all amounts and timelines are transparent from the outset.
Note there are some fees related to a home purchase that are not included in the Murabaha agreement. These are the responsibility of the home buyer and include fees for legal, appraisal, inspection, title insurance (if required), etc. These fees are payable directly to each vendor at the time the service is provided.
The Servus Halal Mortgage contract can be paid in full at any time. The amount owing doesn’t change if the mortgage is paid off early and will include all costs and profit amount outstanding.
Servus Halal may, in its sole discretion, forgive a portion of the profit outstanding (to a maximum amount) that lets it recover damages for breaking the contract early.
Partial prepayments are not available under the terms of a Servus Halal home finance product.
No. The agreement is tied to the specific property. Moving it requires settling the existing Murabaha agreement and applying for new Servus Halal mortgage financing related to the new property.
Your purchase deposit is collected when you sign the Letter of Intent and is held by the lawyer "in trust" so it is not confused with the down payment before Servus Halal owns the property. This protects Shariah compliance.
Keep copies of your Murabaha Sale Agreement, payment schedule, proof of payments, property documents, and any important written communication related to the transaction. It is also advisable to retain annual statements, insurance documents, and closing paperwork for your own personal records.
You are required to maintain valid home insurance for the full replacement value of the property throughout the term of the agreement. The policy must list Servus Halal as the First Loss Payable. You are also responsible for ensuring that the insurance coverage remains active at all times and for providing proof of coverage upon request.
From an Islamic perspective, insurance is generally considered permissible when it is required by law or when there is a pressing need for it.
Default, Disputes & Enforcement
Review the terms of your contract with Servus Halal for these details. In general, we can tell you the following, based on our certification of the Murabaha agreement:
There is no interest (Riba) charged and no late-payment penalties. The Murabaha agreement is structured to avoid interest (Riba) entirely.
In addition, Servus Halal does not charge non sufficient funds (NSF) fees for failed processing of a monthly payment. However, Servus Halal does not have control over fees that may be charged by your bank.
If a delayed payment causes actual financial loss or expense to Servus Halal, such as unpaid property taxes, an insurance lapse, or other obligations tied to the property, you may be responsible for covering the actual costs incurred by that delay.
If you fail to meet your mortgage payment obligations under the Murabaha agreement, Servus Halal will first attempt to work with you to resolve the situation. This may include providing a grace period up to 30 days.
If the default continues and no resolution can be reached, Servus Halal may pursue the remedies outlined in the Mortgage and Murabaha agreements, which may include initiating foreclosure or other legal proceedings in accordance with Canadian law.
In such cases, the property may be sold to recover the outstanding balance, and any remaining obligations would be handled according to the terms of the agreement and applicable law.