Al Rayan Bank cuts rates on Buy To Let range
Al Rayan Bank, the UK’s largest Islamic Bank, has reduced rental rates on its Buy-to-Let Purchase Plans (BTLPP) range by 0.50%
The reduction means that discounted rental rates are now available at 3.64% and fixed rental rates are available from 3.74% for landlords.
The reduced rates are available on up to 75% finance to value (FTV) on rent and acquisition products, and up to 65% FTV on rent-only products.
| Finance to value | Discounted Variable | Fixed | Expat Discounted Variable | Expat Fixed | |
| 75% (65% Rent Only) | 3.64% | 3.74% | 3.89% | 3.99% |
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 £1,500,000
- Minimum property value of £80,000
Maisam Fazal, Chief Commercial Officer at Al Rayan Bank, said: “We are committed to making Sharia compliant buy to let property finance as affordable as possible to landlords. It’s therefore important that we continue to offer competitive rates to our customers to help open up further opportunities in the buy-to let-space.
“We expect that the lower rental rates will attract landlords looking for alternative home financing products which are in keeping with the ethical values of Islamic banking.”
Al Rayan Bank's BTLPP uses the Islamic finance principles of co-ownership (diminishing musharaka) with leasing (Ijara). Landlords acquire the property in partnership with the bank, and monthly payment contributions increase their share of the home.
They will also pay a rental charge to the bank for the proportion of the property they do not own yet. Upon completion of the term, the landlord becomes the sole owner of the property.