"I’m confident that our pilot will be successful and we are planning to launch a fuller range of products early next year."
Gatehouse Bank has launched its first product for homebuyers after securing regulatory approval.
The Shariah-compliant Bank’s first Home Purchase Plan product, an alternative to a conventional mortgage, will initially be available through intermediary partner One Option Finance.
Following an initial pilot period, Gatehouse will roll out a wider range of products early in 2019 and will make the full offering available to all its intermediary partners.
As a Shariah-compliant Bank, Gatehouse does not charge interest and 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 Bank's two-year fixed term HPP has an initial rental rate of 3.19% at a maximum finance to value of 50% of the property value.
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, 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.”