Full or partial finance settlement after 1 October 2025

Your finance will naturally settle at the end of your HPP or BTLPP term, once the final payment is made. However, you can choose to settle early if you wish.

Early settlement

If your current rental rate started on or after 1 October 2025, an Early Settlement Premium (ESP) may apply if you:

• Settle your finance early, or
• Make additional payments above your annual allowance.

This premium helps cover the Bank’s costs when a customer exits their agreement early. Al Rayan Bank does not profit from this charge.

When the Early Settlement Premium applies

ESP applies to all product switch rental rates for:

• Home Purchase Plans (HPP)
• Buy to Let Purchase Plans (BTLPP)

It does not apply to:

• The Al Rayan Bank Standard Variable Rental Rate
• Any previous rental rates

How the Early Settlement Premium works

A 2% premium is applied in the following cases:

• You settle your finance in full before the end of your fixed or discounted rental rate period. This is 2% of your finance balance on the settlement date.
• You make additional acquisition payments (AAPs) that exceed your annual allowance.

What to expect when settling your finance

Step 1 – Request a settlement statement

You or your solicitor should contact the Bank to request a settlement statement. You’ll need to provide a proposed settlement date, which must be within the next 30 days.
Email: settlements@alrayanbank.co.uk

Step 2 – Receive your settlement balance

Our Payments Processing Team will calculate your settlement balance, including:

• Any rent due up to the settlement date
• Any applicable Early Settlement Premium
• The Bank’s solicitor’s legal fee:
  • £240.00 (including VAT) for properties in England and Wales
  • £270.00 (including VAT) for properties in Scotland

The settlement statement will be sent to all relevant parties by post or email.

If your finance settles naturally, we’ll confirm in writing that your final payment has been made and outline the next steps for transferring the property title.

Important: If you’re settling early, you must provide proof of the source of funds. Please email this to settlements@alrayanbank.co.uk

Step 3 – transfer funds

You or your solicitor will need to transfer the settlement amount to Al Rayan Bank. Once received, we’ll notify our solicitors.

If funds are received before the settlement date, they’ll be applied on the day they arrive.

Please note:

If funds are not received on the settlement date, your finance will remain active and payments will continue. If a new settlement statement is needed, you’ll need to repeat Step 1. A £20 charge applies for each new statement and will be added to your settlement balance.

Step 4 – Transfer of title

If you’ve appointed a solicitor, they must:

• Surrender the sublease to the Bank
• Submit the transfer of title application to HM Land Registry
• Monitor the application and confirm the title has been transferred to you

If you haven’t appointed a solicitor, the Bank’s solicitor will:

• Surrender the sublease
• Send the discharge and transfer documents directly to you

You’ll be responsible for any fees and for ensuring the title transfer is successfully completed with HM Land Registry.

We're Here to Help

If you have any questions about settling your finance, whether early or at the end of your term, please get in touch. We’re happy to help.