Settling your HPP or BTLPP finance

If you're interested in settling your finance, this page explains what to do and what to expect.

Settling your home finance is the point at which you complete your acquisition of AlRayan Bank's share in the property and own it outright. Settlement happens naturally at the end of your Home Purchase Plan (HPP) or Buy to Let Purchase Plan (BTLPP) term, but you also have the option to settle early if your circumstances change.

What to expect, step by step

Step 1: Request a settlement statement

You or your solicitor will need to contact us, including your full name and a proposed settlement date (no more than 30 days in advance). Send your request to settlements@alrayanbank.co.uk. If you're settling early, please also include proof of the source of funds.

Step 2: We calculate your settlement balance

Our Payments Processing Team will calculate your settlement balance, including any accrued rent up to your settlement date. The following fees are included:

£240.00 (including VAT) for England and Wales
£270.00 (including VAT) for Scotland
£20 per statement

Once this fee is received, we'll instruct our solicitors to proceed, and a copy of your settlement statement will be sent to all relevant parties by post or email. If your finance settles naturally at the end of your term, we'll write to confirm your final payment has been made and outline the next steps for the transfer of title.

Step 3: Transfer your funds

You (or your solicitor) will need to transfer the full settlement amount to AlRayan Bank. If funds are received early, they'll be applied on the date received. If payment isn't received on time, your finance will remain in place, your monthly payments will continue, and you may need to request a new settlement statement. Once your payment is received, we'll instruct our solicitors to proceed.

Step 4: Transfer of ownership

This is the final step, where the property is transferred fully into your name.

If you have a solicitor, they'll manage the transfer and ensure it's completed with HM Land Registry

If you don't have a solicitor, the Bank's solicitor will send the required documents to you, and you'll need to arrange the transfer of ownership yourself

Any legal costs at this stage are your responsibility.

What happens next?

Once your finance is settled, your account will be closed
Property ownership will be transferred to you
You'll receive confirmation once the process is complete

How long will it take?

This depends on your chosen settlement date, when funds are received, and how quickly the legal transfer is completed. We aim to respond to queries within 3 working days.

Need help?

If you have questions about settling your finance early or at the end of your agreement, email settlements@alrayanbank.co.uk with your full name and details of your query, or contact us using our online webform.

Helpful links

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.

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