Borrowing from a riba-based bank in order to buy a house
Question

                I want to take a loan from the bank in order to buy a house. This will involve the following: 

1 – I join the bank al-iskaan (bank that deals in mortgages) and pay 182 dinars a month for four years, i.e., 8736 dinars in total, which will become 10,000 dinars (deposits plus interest). 

2 – Then I will be able to borrow 20,000 dinars from the bank, which I will have 13 years to pay back at an interest rate of 6.75% per year. 

3 – In addition to that, there is a top-up loan of 20,000 with an interest rate of 8.25%. 

When I move into the house, I will be renting it from the bank until the loan is paid off, then it will become mine. The period for paying off the loan is between 13 and 15 years. What is the ruling on this?.
Praise be to Allah.
    Dealing with riba (usury, interest) is a major sin against 
    which Allaah has issued a stern warning. He says (interpretation of the 
    meaning): 
“O you who believe! Fear 
    Allaah and give up what remains (due to you) from Ribaa (from now onward) if 
    you are (really) believers.

    279. And if you do not do it, then take a notice of war 
    from Allaah and His Messenger but if you repent, you shall have your capital 
    sums. Deal not unjustly (by asking more than your capital sums), and you 
    shall not be dealt with unjustly (by receiving less than your capital sums)”

    [al-Baqarah 2:278]

    “Those who eat Ribaa will not stand (on the Day of 
    Resurrection) except like the standing of a person beaten by Shaytaan 
    (Satan) leading him to insanity. That is because they say: “Trading is only 
    like Riba,” whereas Allaah has permitted trading and forbidden Riba. So 
    whosoever receives an admonition from his Lord and stops eating Riba, shall 
    not be punished for the past; his case is for Allaah (to judge); but whoever 
    returns (to Riba), such are the dwellers of the Fire — they will abide 
    therein”

    [al-Baqarah 2:275]

    And it was proven that the Prophet  (peace and blessings 
    of Allaah be upon him) cursed the one who consumes riba and the one who pays 
    it. Narrated by al-Bukhaari, 5962. In the transaction asked about here, both 
    the individual and the bank are giving and taking riba. The Prophet  
    (peace and blessings of Allaah be upon him) said: “A dirham which a man 
    consumes as riba knowingly is worse before Allaah than thirty-six acts of 
    zina.” Narrated by Ahmad and al-Tabaraani; classed as saheeh by al-Albaani 
    in Saheeh al-Jaami’, no. 3375. And he said: “There are seventy-two 
    types of riba, the least of which is like a man committing incest with his 
    mother.” Narrated by al-Tabaraani in al-Awsat; classed as saheeh by 
    al-Albaani in Saheeh al-Jaami’, no. 3537. 

    The scholars are unanimously agreed that every loan involving 
    interest or any kind of benefit is haraam. Ibn Qudaamah (may Allaah have 
    mercy on him) said: Every loan in which it is stipulated that an additional 
    payment be made is haraam, with no scholarly dispute. Ibn al-Mundhir said: 
    They are unanimously agreed that if the lender stipulates that the borrower 
    must pay extra or give a gift, and he gives the loan on this basis, this is 
    riba. It was narrated from Ubayy ibn Ka’b, Ibn ‘Abbaas and Ibn Mas’ood that 
    they forbade loans that lead to any kind of benefit (extra payment, gifts, 
    etc).  Al-Mughni, 6/436. 

    Secondly: 

    With regard to the idea of you renting the house until the 
    loan is paid off, after which it will be yours, this is also haraam. We have 
    already stated in the answer to question no 
    
    (14304) 
    that rent-to-own schemes are haraam. 

    To sum up, this transaction is haraam and it is darkness upon 
    darkness. It is not permissible for a Muslim to take the matter of riba 
    transactions lightly after the stern warning about such transactions has 
    been proven and it has been definitively established that they are haraam. 
    Rather what he must do is to seek that which is halaal, for every body that 
    is nourished by haraam, the Fire is more suited for it. But whoever gives up 
    something for the sake of Allaah, Allaah will compensate him with something 
    better than it. 

    The Standing Committee was asked about the Islamic ruling on 
    taking a loan from a riba-based bank in order to build a modest house. They 
    replied: 
It is haraam to take a 
    loan from banks or elsewhere with riba, whether that is to build something 
    or to spend it on food, clothing or medical expenses or to start a business 
    and earn more money, or any other purpose, because of the general meaning of 
    the verses that forbid riba, and the general meaning of the ahaadeeth which 
    indicate that it is haraam. Similarly it is not permissible to deposit money 
    in banks etc that pay interest.

     And Allaah is the Source of strength. May Allaah send 
    blessing and peace upon our Prophet Muhammad and his family and companions. 

    Fataawa al-Lajnah al-Daa’imah 
    (13/385). 

    And Allaah knows best.