Buy To Let Purchase Plan

Sharia compliant buy to let mortgage alternatives for customers able to contribute at least 25% of the 
property's value as a deposit.

75%Finance to value

Up to 75% finance to value

Fixed 3.89%*

  • Rental rate fixed until 31 December 2019
  • Reverts to Al Rayan Bank Variable Rental Rate on 1 January 2020
  • 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 3.99%*

  • Rental rate discounted until 31 December 2019
  • Discounted from Al Rayan Bank Variable Rental Rate of 5.24%, which is base rate + 4.99% margin
  • Reverts to Al Rayan Bank Variable Rental Rate on 1 January 2020
  • 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.

Procuration fees

For referred cases, Al Rayan Bank will pay a procuration fee upon completion of:

Home Purchase Plan 0.35% (gross)
Buy To Let Purchase Plan 0.50% (gross)

To register contact us online or by calling 0800 694 7238

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 rent rate effective from 1st April, 1st July, 1st October and 1st January
  • Following the expiry of the fixed rental rate, additional acquisition payments can be made in the month prior 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 HPP 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)

 

Payment options

Acquisition and rent

With this option the customer's 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 the Bank's share in the property. As long as the customer makes all of the monthly payments, they will have acquired Al Rayan Bank's share in the property by the end of the finance term.

With this payment option

The customer's monthly payment covers both the rent they must pay and increases their share in the property

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

Rent only

With a rental only payment option the monthly payments made by the customer only covers the rent that Al Rayan Bank charges you. With this type of finance they are not acquiring any of the Bank's share in the property.

As long as the customer makes all of the monthly rental payments, their share in the property at the end of the finance term will be the same as at the beginning (unless they have made additional acquisition payments during the finance term). To acquire the Bank's share in the property, they 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

The customer's monthly payment only covers the rent; they will still need to acquire the Bank's share in the property at the end of the finance term

They will need to put plans in place to ensure that you have a lump-sum that enables you to acquire the Bank's share in the property at the end of the finance term

The customer's monthly payments will be lower than the alternative acquisition and rent payment option

It is the customer's responsibility to make sure that they put plans in place to acquire the Bank’s share in the property at the end of the finance term.

If you cannot acquire Al Rayan Bank's share at the end of the term, there is a risk that the Bank may sell the property to clear the outstanding finance amount and ultimately the customer may lose the property.

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