Buy To Let Purchase Plan

Pay rent not interest when you purchase your buy to let property - rent only and rent & acquisition options available.

65%Finance to value
YOUR PROPERTY MAY BE AT RISK IF YOU DO NOT KEEP UP THE PAYMENTS ON YOUR BUY TO LET PURCHASE PLAN

Up to 65% finance to value

Fixed 2.99%

  • Rental rate fixed until 30 June 2019
  • From 1 July 2019 reverts to Al Rayan Bank Variable Rental Rate which for BTL = 5.24% (Bank of England Base Rate + 4.99% margin)
  • Product fee of 1% of finance amount (minimum £995)
  • Promotional rental rate; Al Rayan Bank reserves the right to withdraw the promotion at any time

Discounted Variable 3.19%

  • Rental rate discounted until 30 June 2019
  • Discounted from Al Rayan Bank Variable Rental Rate which for BTL = 5.24% (Bank of England Base Rate + 4.99% margin)
  • Rent only payment option available
  • Product fee of 1% of finance amount (minimum £995)
  • Promotional rental rate; Al Rayan Bank reserves the right to withdraw the promotion at any time

Buy To Let Purchase Plan customers in Scotland pay an 'occupancy payment' under a 'co-beneficiaries' agreement.

Key features

  General information
Finance amount: £30,000 to £1,500,000 - England and Wales (higher amounts may be considered)
Minimum property value: £80,000
Term: 7 - 32 years
Maximum portfolio: Ten properties across all providers
Five properties or £2,500,000 across all Al Rayan Bank finance products
Maximum number of applicants: Up to two applicants
Fees:

Product fee - 1.00% (min £995)

Valuation and legal fees: Paid by the applicant(s)

Al Rayan Bank has created a panel of solicitors who are experienced in the Islamic finance conveyancing process. If you choose to proceed with one of our panel solicitors, Al Rayan Bank will make a £400 (including VAT) contribution towards the Al Rayan Bank legal costs. However, you are not obliged to use one of our panel solicitors.  For more information, please refer to the Buy To Let Purchase Plan Tariff List

Minimum age of applicants: 21 years
Affordability If the rent expected from the property does not meet the rental cover calculation, we may take into account any free personal income the applicant may have to make up the shortfall

 Rent reviews

  • There will be four rent reviews a year in March, June, September and December
  • New rental rate effective from 1 April, 1 July, 1 October and 1 January
  • Following the expiry of the fixed rental rate, additional acquisition payments can be made in the month of each rent review; minimum £4,000 with a £25 administration fee

Margin

  • The bank reserves the right to change the margin on its products however a cap applies of 2%
  • Therefore Al Rayan Bank cannot increase the margin on its BTL products by more than 2% over the margin that applied at the outset
  • You will be given at least 30 days advance notice of any changes in the pricing structure

Settlement

  • The customer has the option to sell the property at any time without any penalties (subject to an administration fee to cover any costs)

How to apply

There are a number of ways to apply for a BTLPP or to request more information:

Phone:

  • Please ring our BTLPP Specialist Sales team on 0800 408 0436* (Mon - Fri 9am - 7pm, Sat 9am - 1pm)

Online:

Branches

For your own benefit and protection, you should carefully read the important information we have prepared, before you complete the application. These documents can be found in the Forms & leaflets section.

To view PDFs you need the Adobe Acrobat Reader. This program is available free of charge from the Adobe website. Al Rayan Bank is not responsible for the content of external websites.

Forms & other information

The following important information should be read:

To view PDFs you need the Adobe Acrobat Reader. This program is available free of charge from the Adobe websiteAl Rayan Bank is not responsible for the content of external websites.

Important information about our rental only payment option.

With a rental only BTLPP the monthly payments you make only cover the rent that Al Rayan Bank charges you. With this type of finance you are not acquiring any of our share in the property.

At the end of the finance term your share in the property will be the same as at the beginning (unless you have made additional acquisition payments during the finance term to increase your share). To acquire Al Rayan Bank’s share in the property you will need to make a lump sum payment at the end of the finance term.

It is your responsibility to put plans in place to ensure that you have sufficient funds to acquire Al Rayan Bank’s share in the property at the end of the finance term.

You should also bear in mind that there is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income you receive will be sufficient to meet the cost of the BTLPP.

A rental only BTLPP is a higher risk than an acquisition and rental BTLPP, where your monthly payment will consist of the agreed rental payment and an acquisition payment, which allows you to buy Al Rayan Bank’s share of the property over the term of the finance agreement.

Payment options

Acquisition and rent

With this option your monthly payment consists of an acquisition payment and a rental payment. The monthly payment covers the rent that Al Rayan Bank will charge, and also acquires a small part of Al Rayan Bank 's share in the property. As long as you make all of the monthly payments, you will have acquired Al Rayan Bank 's share in the property by the end of the finance term.

With this payment option

Your monthly payment covers both the rent you must pay and increases your share in the property

As long as you make all the monthly payments you will own the property outright at the end of the finance term

Rent only

With a rental only payment option the monthly payments you make only cover the rent that Al Rayan Bank charges you. With this type of finance you are not acquiring any of our share in the property.

At the end of the finance term your share in the property at the end of the finance term will be the same as at the beginning (unless you have made additional acquisition payments during the finance term to increase your share). To acquire Al Rayan Bank’s share in the property, you will need to make a lump sum payment at the end of the finance term.

By paying only rent each month your monthly payments will be lower than on an acquisition and rent payment option.

With this payment option

With a rental only BTLPP the monthly payments you make only cover the rent that Al Rayan Bank charges you. With this type of finance you are not acquiring any of our share in the property.

At the end of the finance term your share in the property will be the same as at the beginning (unless you have made additional acquisition payments during the finance term to increase your share). To acquire Al Rayan Bank’s share in the property you will need to make a lump sum payment at the end of the finance term.

It is your responsibility to put plans in place to ensure that you have sufficient funds to acquire Al Rayan Bank’s share in the property at the end of the finance term. 

You should also bear in mind that there is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income you receive will be sufficient to meet the cost of the BTLPP.

A rental only BTLPP is a higher risk than an acquisition and rental BTLPP, where your monthly payment will consist of the agreed rental payment and an acquisition payment, which allows you to buy Al Rayan Bank’s share of the property over the term of the finance agreement.

Buy To Let Purchase Plan case study

Together with his wife, Hassan Ali is looking to purchase his first buy to let property.

He wants to buy the property in an Islamic way - without interest, which is prohibited in Islam.

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