The alleged driver reportedly tried to escape but was pulled out of his large white van by members of the public after hitting pedestrians around midnight.
The footage shows people screaming expletives and “killer” repeatedly at the man as he is held down, his face pushed against the pavement, his hair being pulled.
“Pull his head up, pull his head up,” one man yells.
“He’s a killer… he killed a lot of people.”
Someone else is heard yelling: “Take a picture of his face… ****ing racist ****.”
Amid the angry screaming, people are heard trying to calm the crowd, one man saying: “Don’t worry, officers are here.”
In the video, officers, having managed to break through the crowd, handcuff the suspect.
As they pull the sweaty, red-faced man from clutches of the crowd, people continue screaming at him.
The suspect seemingly goads the crowd, yelling back: “Come on!”
Officers shout, “Move back, move back”, as they try to push people away and get the scene under control.
Police say a man has been arrested on suspicion of attempted murder and terror offences.
He has been named by Sky sources as 47-year-old Darren Osborne, who is listed as living in Cardiff.
The attack happened as the area was busy with worshippers who had been at Ramadan night prayers at Finsbury Park Mosque.
One man died and nine other people were taken to hospital after the attack, which police are treating as terrorism.
A witness, who wanted to be identified as Abdulrahman, said: “I managed to get the driver of the van.
“He wanted to run away and was saying, ‘I want to kill Muslims.'”
Abdulrahman claimed the driver said “Kill me” as he was being held on the ground by the crowd.
Another witness, Hussain Ali, 28, said that while being restrained the suspect was protected by the people he is thought to have been targeting.
He said: “The leader of the mosque said ‘You do not touch him.’ He was sitting and holding him like that, people kept holding him.”
Metropolitan Police deputy assistant commissioner Neil Basu praised members of the public for their actions, saying “their restraint in the circumstances was commendable”.