Al Rayan Bank launches ‘fees assisted HPPs’ for refinance customers
Bank to waive customer’s admin fee and assist with the valuation costs
Al Rayan Bank has announced the launch of a new range of Home Purchase Plans (HPPs), which are designed to make it easier for people looking to move an existing home finance product to the Sharia compliant provider.
The ‘fees assisted’ HPP range will see Al Rayan Bank assist with customers’ refinance costs by waiving or contributing towards some of the upfront fees normally associated with refinancing home finance from one provider to another.
- The £399 HPP administration fee will be waived by the Bank
- The valuation paid by the Bank (up to a maximum of £600)
- Upon the first monthly payment, the Bank will pay a ‘cashback’ of £300 to the customer
The following rental rates are available for ‘fees assisted’ HPP customers until 30 June 2019:
- 60% finance to value. A fixed rental rate of 2.59%* and a discounted variable rental rate of 2.79%*
- 70% finance to value. A fixed rental rate of 2.69%* and a discounted variable rental rate of 2.89%*
- 80% finance to value. A fixed rental rate of 2.89%* and a discounted variable rental rate of 3.09%*
They will revert to the Al Rayan Bank Variable Rental Rate. For HPP and HPPS products this is the Bank of England Base Rate (BBR) +3.99%:
Al Rayan Bank’s home finance is based upon the Islamic finance principles of co-ownership Agreement (Diminishing Musharaka) with leasing (Ijara). Unlike conventional mortgages where money is borrowed from a lender and repaid with interest, when customers buy or refinance a property with Al Rayan Bank, they enter into a joint ownership agreement where each party owns a share of the property. The customer pays rent on the share of the property that the Bank owns while, over time, gradually increasing their share in the property through a monthly acquisition payment. Once all payments have been made, full ownership of the property transfers to the customer without the involvement of interest – which is strictly forbidden in Islam.
Al Rayan Bank is an independent UK bank, authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. It is also a member of the Financial Services Compensation Scheme (FSCS).
Intermediaries can find out more by accessing Al Rayan Bank’s dedicated intermediary support service, which can be contacted on 0800 694 7238. Upon registration, Intermediaries will be able to introduce business to Al Rayan Bank by referral, i.e. the provision of customer contact details.
* Rental rate fixed or discounted until 30 June 2019
Subject to status. Terms and conditions apply.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP THE PAYMENTS ON A HOME PURCHASE PLAN