The reduction means that landlords will benefit from the lowest BTLPP and BRO rental rates in the Bank’s history.
Buy to Let Purchase Plan (BTLPP)
• 35% contribution (65% finance to value): discounted variable rental rate of 3.49%; fixed rental rate of 3.69%^ until 31 December 2017
• 25% contribution (75% finance to value): discounted variable rental rate of 3.89%; fixed rental rate of 3.99%^ until 31 December 2017
Buy to Let Rent Only Purchase Plan (BRO)
• 35% contribution (65% finance to value): discounted variable rental rate of 3.49%; fixed rental rate of 3.69%^ until 31 December 2017
Other product features include:
• No early settlement penalty for clearing the finance in full early, even during a fixed rental rate period (a small administration fee will apply)
• A product fee of 1% (a minimum fee of £995 applies)
• Minimum property finance of £30,000, maximum finance of £500,000
• Minimum property value of £90,000
Unlike conventional mortgages, where the purchaser borrows money from a lender and pays it back with interest, Al Rayan Bank, as a Sharia compliant bank, uses the Islamic finance principles of co-ownership (musharaka) and leasing (ijara) on its property finance products. Al Rayan Bank’s BTLPP customers acquire the property jointly with the Bank, their monthly payments then increase their share of the property, whilst at the same time they pay a rental charge on the portion of the property that they do not yet own. At the end of the finance term, the customer owns the property outright. N.B BRO customers do not make acquisition payments and therefore do not own the property outright at the end of the term. To acquire the Bank’s share, they will need to make an additional lump sum payment at the end of the finance term.
As an Islamic bank Al Rayan Bank does not use any interest-bearing products to finance customers’ properties. Instead it uses the savings deposits from its customers, managed in accordance with ethical, Sharia principles
As an independent UK bank, Al Rayan Bank is authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
