Gatehouse Bank has widened its range of Shariah-compliant home finance products.

The new mortgage alternatives follow the introduction of the Bank’s first Home Purchase Plan (HPP) product — a Shariah-compliant alternative to a traditional mortgage — which was launched in December with a maximum Finance-to-Value ratio (FTV) of 50%.

Following the pilot, Gatehouse is launching a two-year fixed term Home Purchase Plan for UK homebuyers with higher FTV brackets of 65% and 80%.

For UK-residents, the rental rate on the original 50% FTV product remains 3.19%, while 65% FTV attracts a rate of 3.49% and 80% FTV a rate of 3.69%.

How does it work?

As a Shariah-compliant Bank, Gatehouse does not charge interest.

Instead the Bank and customer are joint owners of the property and the homebuyer pays rent on the share of the property that the Bank owns.

Gatehouse’s HPP products offer customers two options; Acquisition & Rent (the equivalent of a conventional capital & interest mortgage) and Rent Only (the equivalent of a conventional interest only mortgage).

Global outlook

Gatehouse also expanded its Home Purchase Plan offering for UK expats and international residents. Its previous sole product for expats has been replaced by two two-year fixed term products with rental rates of 3.69% at 65% FTV and 3.89% at 75% FTV.

The product for international residents has been replaced and extended with the introduction of a 65% FTV product at 3.99% and a 75% FTV option at 4.19%.

None of Gatehouse Bank’s products carry any early payment charges.

Charles Haresnape, CEO of Gatehouse Bank, said: “The launch of our new home buyer products follows a successful pilot, which generated significant interest.

“Gatehouse aims to offer competitive products together with human underwriting that will appeal to a variety of customers, whether or not they require Shariah finance. We plan to continue developing our home finance range and inject some competition into a market that has been poor at offering consumers a real alternative.”