What is the ruling on real estate financing through Ijarah (leasing) as practiced by Islamic banks and their branches? Is it considered permissible, or is it a circumvention of the concept of usurious interest?

It is permissible to purchase a house through Ijarah (definition) Muntahia Bil Tamleek (lease-to-own) if you adhere to the conditions stipulated by the Islamic Fiqh Academy. There is no harm in the bank requiring insurance on the client, as long as the insurance is with a cooperative Takaful company. As for the issue of changing the rent during the lease period, most contemporary scholars have opined that it is permissible for the rent to be variable, provided that the lease period is divided into time units, the rent for the first unit is agreed upon, and then the rent is reconsidered according to the prevailing market rent and its fluctuations, and that the criterion is known, leaving no room for dispute, such as the LIBOR interest rate index.