Al Rayan Bank cuts rental rates on its Home Purchase Plans
Al Rayan Bank has reduced the rental rates of its 80%, 70% and 60% finance-to-value (FTV) Home Purchase Plans (HPPs) by 0.50%, making ethical Sharia compliant home finance more affordable in the UK.
- 60% FTV (40% deposit); discounted variable rental rate reduced to 3.14%; fixed rental rate reduced to 3.44%
- 70% FTV (30% deposit); discounted variable rental rate reduced to 3.24%; fixed rental rate reduced to 3.54%
- 80% FTV (20% deposit); discounted variable rental rate reduced to 3.44%; fixed rental rate reduced to 3.74%
Al Rayan Bank has also reduced rental rates by 0.50% on its ‘fees assisted’ HPP range, which is designed to make it easier for people looking to move an existing home finance product to the Bank by contributing towards some of the upfront fees normally associated with refinancing from one home finance provider to another.
Following the fixed or discounted period, all rental rates will revert to the Al Rayan Bank variable rental rate. For HPP products currently this is the Bank of England Base Rate (BBR) plus 3.99%.
Maisam Fazal, Chief Commercial Officer at Al Rayan Bank, said: “Al Rayan Bank is the UK’s oldest and largest Islamic bank and offers the country’s widest range of ethical, Sharia compliant home finance products. We’re committed to providing a full range of home finance options to all of our customers. By reducing the rental rates on our HPP products we are making Sharia compliant home finance more accessible to individuals whatever stage of the property ladder they are on.”
Al Rayan Bank is the only UK bank to offer a full range of Sharia compliant home finance products, which includes products specifically designed to help customers with smaller deposits, typically first-time buyers. The Bank’s 90% and 95% FTV HPPs are available with fixed rental rates of 4.49% and 4.99% respectively.
HPP customers’ monthly payments are made up of two elements, an acquisition payment which increases their share of the property and a rental payment for use of the portion that the Bank still owns. When all acquisition payments have been made and the finance has been settled, ownership of the property transfers to the customer.
As an independent UK bank, Al Rayan Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority and the PRA.
Further details can be found in the appendix overleaf
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