Bank of England Base Rate

Find out what happens when the Bank of England announces a Base Rate change

Bank of England Base Rate

What happens when the Bank of England announces a Base Rate change?

Following any change in the Bank of England Base Rate (BoEBR) we review our Variable Rental Rates and decide what, if any, changes need to be made.

Variable Rental Rates

For customers on an existing Variable Rental Rate (discounted or not), the rental rate will be reviewed quarterly in March, June, September and December and any changes to the monthly payments will be advised.

Important: For all ‘On-Sale’ rental rates currently under offer during the product switch process, or loyalty rates offered to product expiry customers, any change to the Bank of England Base Rate taking place prior to your new deal completing, would be applied immediately to the ‘On-Sale’ rental rate under offer and monthly payments amended accordingly.

After your deal has completed or your new rental rate has been applied to your account, your rental rate is then reviewed quarterly in March, June, September and December and any changes to the monthly payments will be advised.

Fixed Rental Rates

For customers on a Fixed Rental Rate there will be no change to the monthly payments, until your Fixed Rental Rate agreement ends.

What is the current Bank of England Base Rate

Details of the current Bank of England Base Rate can be found at: https://www.bankofengland.co.uk

Frequently asked questions

We answer some frequently asked questions about home finance.

HPPs operate completely without interest, or riba, and that is the fundamental difference.

When a person purchases a property with a conventional mortgage, a Bank lends them the money and then charges interest on that loan. Al Rayan Bank HPPs are different; we purchase the property in partnership with our customers with each party owning a share. The customer then buys our stake in the property over time, paying rent on the portion that they do not yet own. At the end of the agreement, the customer owns the property outright- without ever paying interest.

Islamic banks use conventional indices such as the Bank of England Base Rate (BBR) to price their products as these are most accurate, widely accepted and consistent benchmarks for financing. This allows Islamic banks to meet the important Sharia criteria of ensuring consistency and avoiding uncertainty.

The alternative would be to use local rental rates, however this would create too much variation as rental rates fluctuate depending on a number of factors, such as the condition of the property or proximity to a good school. Consequently, we would not be able to offer a fair and consistent rental rate across the country. Not only is this prohibited in Sharia but it would also be costlier for the customer.

The use of a well-recognised benchmark therefore allows us to offer better value for the customer by pricing products that are in line with the market.

Educate A Child International 36 Month Fixed Term Deposit

Digital Banking

Educate A Child International 36 Month Fixed Term Deposit

Digital Banking

Bank of England Base Rate

Bank of England Base Rate

Frequently asked questions