Preview Terrace Row of houses

Variable Rental Rate

The Al Rayan Bank Variable Rental Rate is a variable rental rate which is benchmarked against the Bank of England Base Rate, plus our margin.

Variable Rental Rate

What is the current Bank of England Base Rate?

Details of the current Bank of England Base Rate can be found at: https://www.bankofengland.co.uk/

Why are home finance products benchmarked to the Bank of England Base Rate?

Sharia does not prohibit the use of benchmarking as long as it is a commonly recognised and easily accessible benchmark.

A benchmark is an important tool in Islamic finance; Islamic banks must ensure that their products, and the prices that are charged, avoid uncertainty for the customer and are consistent with the prices of the local market.

UK Islamic banks therefore use the Bank of England Base Rate to price their products, as it is very widely recognised and enables them to meet these important criteria.

An Al Rayan Bank Home Purchase Plan is based on the Islamic finance principles of Diminishing Musharaka (diminishing partnership) and Ijara (leasing). The benchmark does not impact these principles or the way in which a Home Purchase Plan work, and its use does not introduce interest into the arrangement.

Frequently asked questions

We answer some frequently asked questions about home finance.