Mortgage Vs Loan For A House
First scenario is fine while the second scenario would result in riba. It is not the same thing with respect to results of both transactions. In first scenario, house need not be reproduced and can be confiscated anytime by the bank in case of default, while in the second scenario, principal amout of loan plus the interest charged over that amount both need to be reproduced. Please see for Details : Discussion 65020 Discussion 40481