How does it work?
 
The Home Purchase Plan is based on the accepted and widely used Islamic financing principles of Ijara (leasing) and Diminishing Musharaka (reducing partnership).

For example, the bank may contribute 80% and you 20% of the purchase price. Over a period of up to 30 years, you will make monthly purchase instalments through which the Bank will sell its share (80%) of the home to you. With each instalment paid, the Bank’s share in the property diminishes while your share correspondingly increases.

The key features are listed below, with calculators available from the menu on the left, as well as a secure online Agreement in Principle which allows you to proceed to an online application form.

Key features

• 80% maximum finance to value

• Minimum £70,000 finance

• Maximum £750,000 finance

• Rent Rates (see note 1 below)

o Standard         -      Base rate + 1.95%
o Fees assisted   -      Base rate + 2.35%

• Introductory administration fee of £299*

• Term is 7 years to 30 years

• Available for new purchases, refinancing and releasing additional capital

• Option to choose a fees assisted product where the valuation and legal fees are paid by IBB (see note 2 below)

• Additional lump sum payments can be made in February and August prior to each rent review

• Customers can sell the property at any time subject to purchasing the Bank’s share in full

• Customers can make full payment at any time without any penalties

• Income from up to four people can be taken into account when assessing an application (see note 3 below)

• An affordability criteria is used in which a customer’s income and expenditure is assessed

• Minimum age of applicants is 21 years and maximum age is 65 years

• Rent is reviewed every six months in March and September, with the new rent rate effective from  April and October

• Payments can be made from your IBB account or by Direct Debit from any other UK account

• Six monthly statements at rent reviews

* Introductory offer may be withdrawn at any time

Notes:

1
• There is a minimum collar rate for all our products at 5.95%.  This
means the minimum rent will be 5.95% regardless if the Bank of England base rate goes lower.
• The Bank reserves the right to change the margin on any of its products.  Customers will be given at least 30 days advance notice of any changes in the pricing structure.

2 Fees assisted product:
• The Bank will pay the standard valuation fees. See Tariff List.
• The Bank will pay up to £500 towards the cost of your solicitor’s fees provided that you choose a solicitor from the Bank’s panel list and the Bank will also pay up to £500 towards the cost of its solicitor’s fees.  If the cost of your solicitor and the Bank’s solicitor is more than £500 each, you will be required to pay the difference.
• If you decide to settle your Home Purchase Plan during the first 5 years you will be required to repay to the Bank the full cost of the solicitors and valuation fees incurred.

3  The four people must be owner occupiers of the property being financed.

 
Terms and conditions apply. Please be sure to read those that apply to the product you have chosen. Finance is subject to status and valuation. Applicants must be 21 years of age or over and be a UK resident.

YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS DUE UNDER THE LEGAL AGREEMENTS