Al Rayan Bank mortgage review September 2019

Al Rayan Bank is a Sharia-compliant lender. This means its mortgages charge rent instead of interest. Here's what you need to know.

Last updated:

Al Rayan Bank
warning icon Warning: 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.

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.

L&C Mortgage Advice

London and Country Mortgage Experts

L&C is a specialist broker offering mortgage comparison & free advice.

  • Compare over 80 mortgage lenders
  • Fee FREE mortgage advice
  • Personal customer service from start to finish
  • Open 7 days a week
The mortgage service is provided by London & Country Mortgages (L&C), Beazer House, Lower Bristol Road, Bath BA2 3BA.
L&C are authorised and regulated by the Financial Conduct Authority (reg no. 143002). Please note the FCA does not regulate most Buy to Let mortgages.

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.

Find a mortgage using a broker to compare the market



Save £1,000s on your mortgage. Applying is quick & easy with Habito. Get a quote online in minutes.
Mojo Mortgages

Mojo Mortgages

The Mojo mortgage calculator compares rates in less than 1 minute. A free online mortgage broker.
L&C cobrand


The UK's largest fee-free mortgage broker & adviser. No hidden costs. L&C compares rates from over 80 lenders.

We exist to help you find better. The offers we've compared on this page are from a range of products whose details we can track; we don't cover every product on the market...yet. Unless we've indicated otherwise, products are shown in no particular order or ranking. The terms "best", "top", "cheap" (and variations of these) aren't product ratings, although 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, it's wise to consider getting independent financial advice. Always consider your own financial circumstances when you compare products so you get what's right for you.

Was this content helpful to you? No  Yes
Go to site