WHAT WAS CLAIMED
National Australia Bank offers interest-free home loans exclusively to Muslims.
OUR VERDICT
False. The bank offers Islamic business loans that include an upfront fee instead of interest, not Islamic home loans.
AAP FACTCHECK - A major bank does not offer interest-free home loans exclusively to Muslim people, despite claims online.
National Australia Bank (NAB), one of the big four, offers Islamic-compliant loans for businesses, not homebuyers.
The loans are targeted at Muslims but are available to people of all religions, and while they're structured differently from traditional loans, they still come at a cost to the borrower.
The claim appears in an Instagram video from an Australian account that AAP FactCheck has previously debunked.
"Did you know that you can get a home loan through the National Australia Bank - NAB - interest free," the speaker says.
"In this day and age of the cost-of-living crisis, thank you from the heart, the NAB. But there's one catch. You must practice Islam.
"Because they're doing Sharia law-friendly loans. Because through Sharia law … all loans are interest-free.
"So they're doing that in Australia. Interest-free if you can prove that you're Islamic…"
NAB offers Islamic finance options for businesses seeking a minimum of $3 million to build or buy commercial property and to buy land, businesses, equipment or livestock.
"We have bankers with cultural and religious understanding. And, we've designed innovative solutions to meet the needs of Muslim businesses across Australia," NAB's website states.
However, the major lender does not offer Sharia-compliant home loans.
"The claim that NAB offers Islamic-compliant, interest-free home loans exclusively for a particular group of customers is incorrect," an NAB spokesperson told AAP FactCheck.
"The offering in question is for business customers and is not a retail home loan product."
Customers do not have to be Muslim and the bank's Islamic finance services are available to eligible customers regardless of their religion or background, the spokesperson added.
The bank still makes a profit on these loans, but they are structured differently from loans upon which interest is charged.
Instead, the loan's principal value is increased to provide a commercial return to the bank, the NAB spokesperson said.
Muhammad Safiullah, an Islamic banking expert at RMIT University, said Islamic loans differ from conventional loans because Islamic law prohibits Muslims from charging or paying interest.
But banks can still generate income from loans through profit-sharing arrangements, Dr Safiullah told AAP FactCheck.
"Instead of providing interest-based loans, Islamic banks use Shariah-compliant financing structures, such as partnerships, joint ventures, and leasing arrangements," he said.
Islamic finance institutions are also prohibited from supporting industries considered harmful under sharia law, such as alcohol, tobacco and gambling.
Islamic home loans are offered by specialist providers rather than the major banks, Dr Safiullah added.
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