Al Rayan Bank mortgage review

Al Rayan Bank is a Sharia-compliant lender. This means its mortgages charge rent instead of interest.

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Fact checked
Al Rayan Bank
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Al Rayan Bank follows Sharia law, which forbids companies from charging interest. This means its mortgages work a little differently from most.

Its version of a repayment mortgage works similarly to a shared ownership agreement. You’ll buy a percentage of your property with your mortgage deposit, while the rest will be owned by the bank. Your monthly payment increases your share in the property, but also includes a rental payment for the bank’s share of the property. At the end of the mortgage term you will own the property outright.

The bank’s version of an interest-only mortgage involves an agreement to make these rental payments for the length of the term, with an option to buy the bank’s share of the property outright afterwards.

Al Rayan Bank’s mortgages have no early repayment charges.

Compare Al Rayan Bank’s mortgage rates

Data indicated here is updated regularly
Name Product Initial rate Revert rate (SVR) Maximum LTV Overall cost for comparison Apply link
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2025 Fixed
Al Rayan Bank
3.14% fixed until 31/12/2025
4.09% (variable)
60%
0% APRC
Compare now
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Data indicated here is updated regularly
Name Product Initial rate Revert rate (SVR) Maximum LTV Overall cost for comparison Apply link
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.04% fixed until 31/12/2022
4.09% (variable)
60%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.14% fixed until 31/12/2022
4.09% (variable)
70%
0% APRC
Compare now
loading

Compare up to 4 providers

Data indicated here is updated regularly
Name Product Initial rate Revert rate (SVR) Maximum LTV Overall cost for comparison Apply link
Al Rayan Bank Term Variable
Al Rayan Bank
4.09% variable (Base Rate plus 3.99% for up to 35 Years)
0% (variable)
80%
0% APRC
Compare now
Al Rayan Bank Term Variable
Al Rayan Bank
4.09% variable (Base Rate plus 3.99% for up to 35 Years)
0% (variable)
80%
0% APRC
Compare now
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Al Rayan Bank’s buy-to-let mortgage rates

Data indicated here is updated regularly
Name Product Initial rate Revert rate (SVR) Maximum LTV Overall cost for comparison Link
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.39% fixed until 31/12/2022
5.09% (variable)
80%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.39% fixed until 31/12/2022
5.09% (variable)
80%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.59% fixed until 31/12/2022
5.09% (variable)
80%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.59% fixed until 31/12/2022
5.09% (variable)
80%
0% APRC
Compare now
Al Rayan Bank 31/12/2022 Fixed
Al Rayan Bank
3.89% fixed until 31/12/2022
5.09% (variable)
75%
0% APRC
Compare now
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Overall representative example
If you borrow £170,000 over a 25-year term at 1.75% p.a. (fixed) for 62 months reverting to 4.74% p.a. (variable) for the remaining term, you would make 62 monthly payments of £700.04 and 238 monthly payments of £912.95. The total payable would be £261,424.58, which includes interest of £90,685 and a product fee of £495. The overall cost for comparison is 3.6% APRC representative.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Al Rayan Bank lender profile

  • Al Rayan Bank follows Sharia law, which means you will not be charged interest.
  • Your monthly mortgage payments will increase your share in the property, which includes a rental payment for the bank’s share of the property.
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What types of mortgage does Al Rayan Bank provide?

  • Home Purchase Plan (fixed rate). This is the bank’s version of a repayment mortgage. You can be eligible for this deal with a deposit as small as 5% of the property value. These deals are available with a fixed “rental rate” for either two or three years. After this period, the rate will revert to the Al Rayan Bank Variable Rental Rate, which is fixed to a specific percentage above the Bank of England base rate. These products have a one-off administration fee attached.
  • Home Purchase Plan (discounted rate). With this mortgage type, the “rental rate” is fixed at a specific percentage below the Al Rayan Bank Variable Rental Rate. It will revert back to this rate after two years.
  • Buy-to-let Purchase Plan. The lender offers both versions of its Home Purchase Plan to landlords purchasing a buy-to-let property. To be eligible, you must raise a deposit worth at least 25% of the property value. This deal comes with a product fee worth 1% of the amount borrowed.
  • Refinancing. If you’re looking to switch from a traditional non-Sharia mortgage, Al Rayan Bank will waive your administration fee and valuation fee. It also offers cashback of up to £300 on its refinancing mortgages.

How do I contact Al Rayan Bank?

You can discuss your queries about Al Rayan mortgages by visiting a local branch, filling out the contact form on its website or calling 0800 4083 093. Phone lines are open on weekdays from 9am to 7pm or Saturdays between 9am and 1pm.

How do I apply for an Al Rayan Bank mortgage?

You can apply for an Al Rayan Bank mortgage by visiting one of its branches, calling 0808 231 3363 or filling out its online application form.

In all circumstances, you’ll need your personal details and detailed information about your income and outgoings to hand.

Eligibility criteria

To be considered for an Al Rayan Bank mortgage, you must:

  • Be aged 21 or over
  • Be a UK resident or a UK national living abroad
  • Secure the loan against a property valued at least £80,000

Mortgage loans can be between £30,000 and £1,500,000 depending on your circumstances. Mortgage terms can range between 7 and 32 years.

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What information is needed to apply

As well as your personal details, you’ll need to supply various financial and employment details, including information about your employment status, job type, any previous or existing mortgages, anticipated retirement income etc.

Contact information (address, email etc)

You can call Al Rayan Bank on 0808 115 0985 or send an email via the form on its website.

Alternatively, visit a local brank or send a letter to Customer Services team, Al Rayan Bank PLC, PO Box 12461, Birmingham, B16 6AQ.

Can I make overpayments?

No.

Does Al Rayan Bank offer any customer incentives?

Many customers appreciate the Sharia-compliant nature of Al Rayan Bank’s mortgage products.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

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