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April 2, 2009    

Islamic bank launches new House Purchase Plan

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by Gill Montia
Islamic bank launches new House Purchase Plan

Islamic Bank of Britain (IBB) has launched a House Purchase Plan which it claims combines a low rate with a low fee.

The Sharia’a-compliant lender says it is intent on increasing its share of the mainstream mortgage market with its offering of a fixed-rate of 3.99% plus £299 in administration costs.

The rate is fixed until June 2010 and according to IBB will compete “head-on with conventional banks for their new and existing customers, dispelling the myth that Islamic banking is costly.”

There is no collar or tie–in when the fixed rate ends and borrowers can make extra capital repayments without facing penalties.

Commercial director, Sultan Choudhury, comments: “IBB is really throwing down the gauntlet to conventional banks with this new fixed rate Home Purchase Plan.”

He adds: “The bank is open to customers of all faiths, so my call to UK homebuyers and homeowners is to put any misapprehensions to one side and come and find out how a Home Purchase Plan from IBB can really make a difference to your pocket.”

IBB finances is lending from its own funds and deposits, which are managed on a Halal basis.

Its mortgages consist of two elements: a rental element, whereby the homeowner pays rent on the bank’s share of the property and an acquisition element through which the borrower purchaser the bank’s share in the property.

Earlier this month, IBB launched its first Sharia’a-compliant fixed-term deposit account, which it says is the UK’s first to accord with Sharia’a law.

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Tags: , IBB, Islamic Bank of Britain, , , , Sharia’a