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Gatehouse Bank launches first five-year fixed Islamic mortgage


Gatehouse Bank has launched its first 5 Year Fixed Home Purchase Plan (HPP) product alongside rate cuts across its other fixed terms. 

This is the longest fixed-rate the Bank has offered since launching Home Purchase Plans — the Shariah-compliant equivalent of a traditional mortgage — in March. 

The new 5 Year Fixed HPP attracts an initial rental rate — as low as 2.99 per cent. The maximum Finance-to-Value (FTV) — the equivalent of Loan-to-Value (LTV) — will be 80 per cent for UK residents and UK Expats, and 75 per cent for International residents.

HPPs attract no early payment charges, a feature that is increasingly attractive the longer a fixed rate applies.

Meanwhile, Gatehouse is also improving the lowest rates available on all of its existing HPP products by up to 0.7 per cent. The Bank’s 2 Year Fixed HPP for UK residents is reducing from 3.19 per cent to 2.79 per cent at 50 per cent FTV.

In addition, the Bank is also raising the amount of HPP finance available to UK Expats, increasing the FTV ceiling from 75 per cent to 80 per cent on its 2 Year Fixed to match the new 5 Year Fixed product. 

For both UK Expats and International residents, it is also introducing a new 50 per cent FTV band for HPP, which it expects to prove attractive to those seeking to refinance. For UK Expats, this means rates now start at 2.99 per cent for the 2 Year Fixed and 3.39 per cent for the 5 Year Fixed. For International residents, the 2 Year Fixed starts at 3.49 per cent and the 5 Year Fixed at 3.79 per cent. 

Gatehouse has also amended rates on its Buy-to-Let (BTL) range for UK residents, UK Expats and International residents. All are still available with 2 Year and 5 Year fixed rates. For UK residents, the 2 Year Fixed and 5 Year Fixed BTL products have seen their rates rise 0.5 per cent to 3.75 per cent and 4.29 per cent respectively. 

Gatehouse has been building a reputation as a destination for home buyers and property investors. Its BTL products serve UK residents, UK Expats, International residents and corporate entities — catering from single units to portfolios up to GBP5 million, including Houses in Multiple Occupations (HMOs) and Multi-Unit Freehold Blocks (MUFBs). 

As a Shariah-compliant Bank, Gatehouse does not charge interest, instead the Bank and customer are joint owners of the property and the customer 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). 

Charles Haresnape, CEO of Gatehouse Bank, says: “We’re seeing strong appetite in our Home Purchase Plan (HPP) and Buy-to-Let (BTL) products. Testament to that is the way we have had to rapidly widen the scope of what we’re offering over the past six months. 

“Since launching HPP and BTL, the early signs are showing a demand for Shariah-compliant products from people who value good service and the way we’re committed to making decisions based on each customers’ circumstances. 

“With an approvals process underpinned by a human approach, not machines, it’s never the computer that says no and we’re not turning people away for no reason, even if other providers already have.”

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