Mortgage question

5
Posted 20th Jul 2020
So I read the below on a banks website. Now stupid question (new to mortgage) is the 3.14% rental rate, 3.14% of the house price or 3.14% of the monthly payment?

“Al Rayan Bank has reduced the rental rates of its 80%, 70% and 60% finance-to-value (FTV) Home Purchase Plans (HPPs) by 0.50%, making ethical Sharia compliant home finance more affordable in the UK.

60% FTV (40% deposit); discounted variable rental rate reduced to 3.14%; fixed rental rate reduced to 3.44%”
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HUKDers won't find that a good deal & will recommend traditional mortgages which won't suit you
No I get that, I just wanted to understand what that message on the banks website means?
colddeal20/07/2020 20:40

No I get that, I just wanted to understand what that message on the banks …No I get that, I just wanted to understand what that message on the banks website means?


You have two choices a variable rental rate which can go up or down for however long the rental period is at 3.14 currently, so it might go up to say 3.59 or down to say 2.79. The other is fixed can’t move so will be 3.44 fir the rental term.

its just using rental as a word instead of mortgage to get it to be sharia compliant
eslick20/07/2020 22:22

You have two choices a variable rental rate which can go up or down for …You have two choices a variable rental rate which can go up or down for however long the rental period is at 3.14 currently, so it might go up to say 3.59 or down to say 2.79. The other is fixed can’t move so will be 3.44 fir the rental term.its just using rental as a word instead of mortgage to get it to be sharia compliant


Thank you very much. But what I’d like to know is in regards to the figure 3.14% - is that a percentage of the house price or a percentage of the monthly payment?
colddeal20/07/2020 22:43

Thank you very much. But what I’d like to know is in regards to the figure …Thank you very much. But what I’d like to know is in regards to the figure 3.14% - is that a percentage of the house price or a percentage of the monthly payment?


Percentage of the house price minus your deposit of 40%, there may be other rates available with smaller deposit but it has to be the percentage of the house price.
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