Residential Islamic Mortgages from IBB

Sharia compliant Islamic mortgage alternatives

Unlike a conventional mortgage where the purchaser borrows money from a lender which is then repaid with interest, Islamic Bank of Britain’s Home Purchase Plans (HPP) are based upon the Islamic finance principles of a Co-Ownership Agreement (Diminishing Musharaka) with Leasing (Ijara).

The monthly HPP payment is made up of two elements, an acquisition payment and a rental payment. When all acquisition payments have been made and the finance has been settled, ownership of the property transfers to you.

Up to 80% finance to value

Discounted Variable 3.99%

  • Rental rate discounted       until 31st December 2015
  • Discounted       from IBB Home Finance Rental Rate of 4.49%, which is base rate + 3.99% margin.
  • Administration fee of £399

Fixed 4.19%

  • Rental rate fixed until 31st December 2015
  • From 1st January 2016 reverts to IBB Home Finance Rental Rate of 4.49%, which is base rate + 3.99% margin.
  • Administration fee of £399

Up to 65% finance to value

Discounted Variable 3.59%

  • Rental rate discounted       until 31st December 2015
  • Discounted       from IBB Home Finance Rental Rate of 4.49%, which is base rate + 3.99% margin.
  • Administration fee of £399

Fixed 3.79%

  • Rental rate fixed until 31st December 2015
  • From 1st January 2016 reverts to IBB Home Finance Rental Rate of 4.49%, which is base rate + 3.99% margin.
  • Administration fee of £399

General information

Finance amount
  • £30,000 to £750,000 (higher amounts may be considered)
Minimum property value

 

  • £90,000
Term

 

  • 7 – 30 years
Maximum number of applicants

 

  • Up to four applicants (all applicants must  be owner occupier)
Fees
  • Administration fee – £399
  • Valuation and legal fees: Paid by the applicant(s).
  • IBB will pay up to £400 (inclusive of VAT) towards the costs of our own solicitor’s fees

 

Minimum age of applicants

 

  • 21 years

Rent reviews

Fixed product

  • The fixed rental  rate will end 30th June 2015
  • The new rental rate will be effective from 1st  July  2015
  • Rent will be reviewed quarterly thereafter in line with our standard product
  • No additional acquisition payments are permitted during the fixed period
  • Additional acquisition payments can be made in the month prior to each rent review

Discounted Variable

  • The discounted  rental rate will end 30th June 2015
  • The new rental rate will be effective from 1st  July  2015
  • 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
  • Additional acquisition payments can be made in the month prior to 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 IBB cannot increase the margin on its HPP products by more than 2% over the margin that applied at the outset
  • IBB cannot change its margin whilst a fixed rent rate applies
  • 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)

 

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