Transfer of Mortgage
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Question
My brother-in-law has a mortgage of 200,000 shekels. We want to make a deal where he transfers 180,000 shekels to me, the entire mortgage will be transferred to me and will continue to be paid by me from today, and in return, the remaining 20,000 will be recorded as a debt he owes me without interest. My goal is to get his mortgage loan with an attractive interest rate and convenient terms. His goal is not to pay interest on the remaining 20,000 and not to get confused every month about how much each owes the other. Is there a way to do this without violating the prohibition on interest?
Answer
Hello
As I understand it, the mortgage is completely transferred to you, meaning you are the one who owes the bank the money. And the loan remaining between you and your brother-in-law is without interest.
Accordingly, you need to arrange a heter iska with the bank, not with your brother-in-law.
Source
Shulchan Aruch, Yoreh De'ah, Siman 177