UK Islamic mortgages are set for growth after the Islamic Bank of Britain received a £20m boost from shareholderQatar International Islamic Bank.
The bank immediately released details of two new products to be launched as a result of the capital injection.
Coinciding with the Islamic holy month of Ramadhan, IBB will today launch a 3.99% fixed rental rate product until January 2012 and a variable rental rate product at 4.99%.
Sharia compliant banking operates without the use of interest and products that are offered are structured in a different way to those provided by conventional banks.
The Home Purchase Plan has a rent element which is the amount that the customer pays to the bank as rent on the bank’s share of the property, in accordance with an Ijara, or lease, agreement.
The rent element decreases as the Bank’s share in the property decreases with each acquisition payment and the customer’s equity in the property increases, with every payment.
Established in 2004, IBB is the UK’s only stand-alone, Sharia compliant retail bank.
Sultan Choudhury, commercial director at IBB, says, “We already offer the largest range of Sharia compliant products and services in the UK. With a fresh injection of capital we are well placed to grow the business through our Home Purchase Plan products. The products will offer peace of mind for customers, both financially and spiritually, which is especially important in the holy month of Ramadhan.”