Islamic Ruling on Buying or Selling a Pledged (Mortgaged) Item

✿ Written by: Saudi Fatwa Committee (Fatāwā)

❖ Selling a Pledged Item to the One Holding It​

There is no Sharʿī objection to selling the pledged item (rahn) to the mortgagee (murtahin)—the one holding it as collateral. The item was originally kept with him as security against a loan.

❖ When the Loan Becomes Due​

If the loan becomes due and the debtor fails to repay, then:

• It is permissible for the mortgagee to sell the pledged item and
• Recover the owed amount from its proceeds

❖ Permissibility of Sale to the Mortgagee or Others​

• The pledger (rāhin) is allowed to sell the pledged item
  
  • Either to the mortgagee (murtahin)
  • Or to any third party
• The buyer must then ensure that the debt owed to the mortgagee is settled from the sale amount.

Reference:
Ibn Jibrīn – Fatāwā, 14/7