Gatehouse Bank unveils its first homebuyer product

Published on

Gatehouse Bank has launched its first product for homebuyers after securing regulatory approval.

The Shariah-compliant bank’s first Home Purchase Plan (HPP) product, an alternative to a conventional mortgage, will initially be available directly from the bank and through One Option Finance, a broker.

Following an initial pilot period, Gatehouse will roll out a wider range of products early in 2019 and plans to make its full offering available to all its intermediary partners.

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 product offers customers two options: Acquisition & Rent (the equivalent of a conventional capital and interest mortgage) and Rent Only (the equivalent of a conventional interest-only mortgage).

The initial product, a two-year fixed term HPP, will appeal to those looking to refinance and homebuyers with a significant deposit.

It offers UK homebuyers:

  • Two-year fixed term with an initial rental rate of 3.19%, reverting to the bank’s Standard Variable Rate, which is currently 5.50%, after the fixed term
  • Maximum Finance to Value of 50% of the property’s value
  • No Early Settlement Charge, even during the fixed term
  • Finance term 5-35 years

Gatehouse Bank’s first Home Purchase Plan product will also be available to expats at a 3.75% initial rental rate and international customers at a 3.99% initial rental rate.

Charles Haresnape (pictured), CEO of Gatehouse Bank, said: “Launching our first Home Purchase Plan product is a milestone for the bank, as this further increases the range of financial services that we are able to offer individuals. We aim to bring additional competition to the home finance market and, due to our Shariah principles, we will not be charging early settlement charges on our Home Purchase Plans, which we believe will prove to be a popular feature with many homebuyers.

“Gatehouse plans to offer competitive products together with human underwriting that will appeal to all homebuyers, Muslims and non-Muslims alike.

“I’m confident that our pilot will be successful and we are planning to launch a fuller range of products early next year.”

Latest POLL

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

The Cumberland partners with FareShare to combat Glasgow food poverty

The Cumberland Building Society’s commercial team has partnered with FareShare Glasgow and the West...

More2life unveils Tailored Interest Reward lifetime mortgage

More2life has launched its latest lifetime mortgage, Tailored Interest Reward, designed to provide later...

Pivot provides complex multi-loan deal for Denby Dale development

Pivot has completed a funding package consisting of three loans for a residential development...

HREF reports record month for lending

Hilco Real Estate Finance (HREF) has recorded its strongest month to date, completing three...

Other news

The Cumberland partners with FareShare to combat Glasgow food poverty

The Cumberland Building Society’s commercial team has partnered with FareShare Glasgow and the West...

More2life unveils Tailored Interest Reward lifetime mortgage

More2life has launched its latest lifetime mortgage, Tailored Interest Reward, designed to provide later...

Pivot provides complex multi-loan deal for Denby Dale development

Pivot has completed a funding package consisting of three loans for a residential development...