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Al Rayan Bank

Formerly known as the Islamic Bank of Britain (IBB), Al Rayan Bank is the UK's only fully Sharia compliant bank. Pioneering Islamic mortgages, finance and banking in the UK since 2004, Al Rayan Bank offers key financial services that comply with Islamic law. Compare Al Rayan Bank mortgages using the table below.

Compare mortgages

Reason for mortgage
£
£
years
How would you like to repay?
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Rate type Initial rate Fees Overall cost
APRC

Overall costs for comparison. This is a way of comparing most costs including interest and fees.

Monthly cost
Rate type
Discounted 31/01/2019
Initial rate
0.98%then 4.74% (variable)
Fees
£1,972fees
Overall cost
4.1%APRC
Monthly cost
£601.55 for 24 months then £885.11 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales
  • Aged 18 or older
  • 75 or younger at mortgage end
  • No repossessions
  • Up to 65.0% loan-to-value (LTV) available.
  • Eligible for first-time buyers, home movers.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 31/01/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £260,698 includes: Loan amount (£160,000); Interest (£98,726); Application fee (£1,495); Valuation fee (£270); Legal fee (£117); Funds transfer fee (£0); Mortgage discharge fee (£90); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Fixed 31/03/2019
Initial rate
0.99%then 3.69% (variable)
Fees
£2,051fees
Overall cost
3.3%APRC
Monthly cost
£602.27 for 24 months then £799.62 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales, Northern Ireland
  • Aged 18 or older
  • No County Court Judgements (CCJs)
  • No arrears
  • No defaults
  • No bankruptcies
  • No repossessions
  • Available for shared ownership
  • Up to 65.0% loan-to-value (LTV) available.
  • Eligible for first-time buyers, home movers.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 31/03/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £237,202 includes: Loan amount (£160,000); Interest (£75,151); Booking fee (£249); Application fee (£1,250); Valuation fee (£227); Legal fee (£295); Funds transfer fee (£30); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Fixed 05/12/2018
Initial rate
1.09%then 3.69% (variable)
Fees
£1,707fees
Overall cost
3.3%APRC
Monthly cost
£609.54 for 24 months then £800.36 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales, Northern Ireland
  • Aged 18 or older
  • 75 or younger at mortgage end
  • No County Court Judgements (CCJs)
  • No arrears
  • No defaults
  • No bankruptcies
  • No repossessions
  • Up to 60.0% loan-to-value (LTV) available.
  • Eligible for first-time buyers, home movers.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 05/12/2016. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £237,235 includes: Loan amount (£160,000); Interest (£75,528); Booking fee (£1,450); Valuation fee (£227); Funds transfer fee (£30); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Fixed 31/03/2019
Initial rate
1.09%then 3.69% (variable)
Fees
£1,551fees
Overall cost
3.3%APRC
Monthly cost
£609.54 for 24 months then £800.36 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales, Northern Ireland
  • Aged 18 or older
  • No County Court Judgements (CCJs)
  • No arrears
  • No defaults
  • No bankruptcies
  • No repossessions
  • Available for shared ownership
  • Up to 60.0% loan-to-value (LTV) available.
  • Eligible for first-time buyers, home movers.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 31/03/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £237,079 includes: Loan amount (£160,000); Interest (£75,528); Booking fee (£99); Application fee (£900); Valuation fee (£227); Legal fee (£295); Funds transfer fee (£30); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Fixed 31/03/2019
Initial rate
1.09%then 3.69% (variable)
Fees
£1,301fees
Overall cost
3.3%APRC
Monthly cost
£609.54 for 24 months then £800.36 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales, Northern Ireland
  • Aged 18 or older
  • No County Court Judgements (CCJs)
  • No arrears
  • No defaults
  • No bankruptcies
  • No repossessions
  • Available for shared ownership
  • Available for existing customers only
  • Up to 60.0% loan-to-value (LTV) available.
  • Eligible for first-time buyers, home movers.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 31/03/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £236,829 includes: Loan amount (£160,000); Interest (£75,528); Booking fee (£99); Application fee (£650); Valuation fee (£227); Legal fee (£295); Funds transfer fee (£30); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Fixed 31/03/2019
Initial rate
1.09%then 3.69% (variable)
Fees
£1,551fees
Overall cost
3.3%APRC
Monthly cost
£609.54 for 24 months then £800.36 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales, Northern Ireland
  • Aged 18 or older
  • No County Court Judgements (CCJs)
  • No arrears
  • No defaults
  • No bankruptcies
  • No repossessions
  • Available for existing borrowers switching deals only
  • Available for shared ownership
  • Up to 60.0% loan-to-value (LTV) available.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 31/03/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £237,079 includes: Loan amount (£160,000); Interest (£75,528); Booking fee (£99); Application fee (£900); Valuation fee (£227); Legal fee (£295); Funds transfer fee (£30); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Tracker 28/02/2019
Initial rate
1.14%then 3.74% (variable)
Fees
£1,480fees
Overall cost
0.1%APRC
Monthly cost
£152.00 for 24 months then £487.30 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales
  • Aged 18 or older
  • 75 or younger at mortgage end
  • Up to 60.0% loan-to-value (LTV) available.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 28/02/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £139,622 includes: Loan amount (£160,000); Interest (-£21,858); Application fee (£995); Valuation fee (£450); Funds transfer fee (£35); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Tracker 28/02/2019
Initial rate
1.14%then 3.74% (variable)
Fees
£1,480fees
Overall cost
0.1%APRC
Monthly cost
£152.00 for 24 months then £487.30 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales
  • Aged 18 or older
  • 75 or younger at mortgage end
  • Up to 60.0% loan-to-value (LTV) available.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 28/02/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £139,622 includes: Loan amount (£160,000); Interest (-£21,858); Application fee (£995); Valuation fee (£450); Funds transfer fee (£35); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Tracker 28/02/2019
Initial rate
1.14%then 3.74% (variable)
Fees
£1,480fees
Overall cost
0.1%APRC
Monthly cost
£152.00 for 24 months then £487.30 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales
  • Aged 18 or older
  • 75 or younger at mortgage end
  • Up to 60.0% loan-to-value (LTV) available.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 28/02/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £139,622 includes: Loan amount (£160,000); Interest (-£21,858); Application fee (£995); Valuation fee (£450); Funds transfer fee (£35); Mortgage discharge fee (£0); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
Rate type
Discounted 31/01/2019
Initial rate
1.15%then 4.74% (variable)
Fees
£1,602fees
Overall cost
4.2%APRC
Monthly cost
£613.92 for 24 months then £886.48 (variable)
for 276 months
Am I eligible?
Please make sure you at least meet the following criteria:
  • Resident of: England, Scotland, Wales
  • Aged 18 or older
  • 75 or younger at mortgage end
  • No repossessions
  • Available for existing borrowers switching deals only
  • Up to 65.0% loan-to-value (LTV) available.
  • Eligible for home movers.

Additional criteria for acceptance from the lender may apply.

Assumed application completion date of 31/01/2017. Repayment mortgage of £160,000 payable over 300 monthly repayments. Total amount payable £261,005 includes: Loan amount (£160,000); Interest (£99,403); Booking fee (£130); Application fee (£995); Valuation fee (£270); Legal fee (£117); Funds transfer fee (£0); Mortgage discharge fee (£90); Deeds release fee (£0); Fees are assumed to be paid up front and not included in the amount borrowed.
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

About Al Rayan Bank

Like all other major high street retail banks, deposits left with Al Rayan Bank are protected up to a total of £85,000 under the Financial Services Compensation Scheme (FSCS).

As a Sharia bank, Al Rayan Bank offers many of the standard financial products and services you would expect to find at any other bank or building society, except that the terms of the offer are made on the principles of Islamic finance.

Customers are able to take out a mortgage, as well as open a current or savings account with Al Rayan Bank.

What is Islamic finance?

The foundation of all Sharia banking, or Islamic finance is based on the principles established within the faith of Islam. These rules or codes for doing business are taken from the teachings in the Qu'ran, and from the example set by the Prophet Muhammad.

Essentially, Islamic finance is based around the central belief that money has no intrinsic value. This means that lending and borrowing money should not return a reward for the lender or a penalty for the person borrowing. Put simply: to make money from money is against the principles of Islam. This means that interest, which is common in all other forms of banking, is not allowed.

Islamic finance is therefore based on sharing risk. While all banks aim to make a profit, including Islamic banks such as Al Rayan Bank, the risk of any trade is shared between the person providing the money or investment and the person providing the expertise. For example, instead of receiving interest on your savings at Al Rayan Bank, they will share the profits they make. Their rates advertised are based on the profits they expect to make.

Islamic finance is also a form of ethical banking, as a Sharia compliant bank will only trade or invest in organisations or products that comply with the religion's principles.

Despite Al Rayan Bank being the UK's only wholly Sharia compliant bank, Islamic banking assets have been growing fast. It is expected that Sharia compliant banks will have a bigger role to play in the future in the growth of economies around the world.

Al Rayan Bank mortgages

With Al Rayan Bank's Islamic finance mortgages, customers pay rent instead of interest on their mortgage (also known as 'home financing' in Islamic banking).

These mortgages, or home financing options, are also known as Hire Purchase Plans (HPP). In essence, the bank enters a joint ownership agreement with you – the more you pay in rent, the larger your share in the property grows.

So, instead of paying interest with a standard mortgage, you are actually paying rent on the bank's share of the property, which allows you to eventually fully own the property.

Use our comparison tables above to compare Islamic finance mortgages from Al Rayan Bank.

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