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A mortgage loan, or simply mortgage, is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged.
Mortgage Loan, Wikipedia

I've read somewhere it is better to consider the amount for Zakah which is going to be paid immediately. Whereby the people I have talked to in general say that all Zakat is deferred until you are free of loans.

Question:

Should all of the amount be treated as loan and hence reduce from net worth, or only calculate zakat on what you need to pay in a year?

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    Mortgage is haram because it's a debt where you pay interest on the principle amount. You should look for alternative financing. – ashes999 Jun 26 '12 at 18:26
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    The question still stands though even for halal, alternative financing. – Ahmad Bushnaq Jun 26 '12 at 19:45
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    Possible duplicate of How to calculate zakat while in debt – Zia Ul Rehman Mughal Apr 14 '16 at 13:34
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Based on the hanafi position, as a mortgage is a loan with a term, you cannot deduct the total amount from your assets. When you are calculating your assets, you are to deduct the current months mortgage payments and any other short term debts, bills, etc.

You will not deduct a years amount, as you look at your asset position at that particular time.

Sources: http://sociable7.com/zakat , I also have covered Zakat extensively.

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    it would be better if you can put your references here. Also please consider How to Answer – nim Jul 18 '16 at 12:58
  • Kashif Hussain mentioned: Based on the hanafi position, as a mortgage is a loan with a term, you cannot deduct the total amount from your assets. I suspect this is incorrect understanding First you calculate the zakatable assets if any debt related to zakatable assets this debt may be deducated from the zakatable you are to deduct the current months mortgage payments this apply to the rental property – katiya Oct 7 '17 at 22:07

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