Islamic Bank of Britain launches Sharia compliant B2L mortgage alternative
Islamic Bank of Britain has entered the buy-to-let mortgage market with the launch of its Sharia compliant buy-to-let purchase plan.
Landlords of any faith looking for ethical and Sharia compliant finance can access IBB’s buy-to-let purchase plan with a deposit of only 25%.
To mark the launch IBB have also announced a promotional procuration fee of 0.5% gross, payable on referrals that drawdown prior to March 31 2012.
The deal is a variable rate product available at a rental rate of 5.49% with an arrangement fee of 1%.
Further features of the product include:
- Finance for landlords for a portfolio of up to five properties
- The ability to make additional payments
- The ability to clear the finance in full at any point without an Early Payment Charge
- Finance of up to £500,000 per property and £750,000 for properties in London, finance above £500,000 will require a 35% deposit.
Simon Walker, head of sales at Islamic Bank of Britain, says: “Buy-to-let is proving to be popular with investors again. Rental yields are increasing and property is seen as a good long-term investment. IBB’s Sharia compliant Buy to Let Purchase Plan will help fuel this growing sector by catering for landlords looking for Sharia compliant finance. IBB anticipates a strong demand for the newly launched product.”
Intermediaries can introduce business to IBB in two different ways, either by a referral process, i.e. the provision of basic customer contact details which pays a promotional procuration fee of up to 0.50% for completed business, or submission of a completed customer application via the website, which also pays a promotional procuration fee of up to 0.50%.
As a Sharia compliant product, it is based on joint ownership and rent. The customer and the Bank buy the property jointly. The monthly payment increases the customer’s share in the property and includes rent on the share that the Bank owns. At the end of the term the customer will own the property outright.
The source of funds for IBB’s BTLPP is 100% Sharia compliant. IBB does not use any interest bearing instruments like bonds or derivatives. Instead it uses its own funds and deposits from customers, all managed entirely in accordance with ethical and Sharia principles.