Compare Mortgage Rates from Gatehouse Bank Against the Market

About Gatehouse Bank

As an Islamic bank, Gatehouse does not offer traditional mortgages. Instead, it provides Home Purchase Plans, which are based on the principle of co-ownership.

Here’s how it works:

1. Co-Purchase: You and the bank buy the property together. Your deposit is your initial share, and the bank provides the rest of the funds

2. Rent & Acquisition: You make a single monthly payment. Part of this payment is "rent" for the portion of the property the bank still owns, and the other part is an "acquisition" payment that buys more of the bank's share

3. Increasing Ownership: With each payment, your share in the property increases, and the bank's share decreases. Consequently, the "rent" portion of your next payment is slightly lower, as you are renting a smaller share

4. Full Ownership: Once all acquisition payments are made, the bank transfers its share of the property to you, and you become the sole owner

This structure allows for home financing without involving interest-based lending. The bank's products are open to all, regardless of faith.

Home Finance Products

Gatehouse Bank offers two main types of Shariah-compliant finance for properties in England and Wales:

• Residential Home Purchase Plans (HPP): This is the alternative to a standard residential mortgage for your own home. It's available for first-time buyers and home movers, with financing available up to 95% of the property's value (a 5% deposit)

• Buy-to-Let (BTL) Purchase Plans: This is the alternative to a BTL mortgage for landlords. Gatehouse has a strong, specialist offering in this area, catering to:

  • UK and Expat/International Landlords: They finance investors living in the UK and those residing abroad

  • Portfolio Landlords: No limit on the number of properties in a portfolio

  • Corporate Entities: Applications are accepted from Limited Companies and SPVs

  • Complex Properties: They will finance Houses in Multiple Occupation (HMOs) and Multi-Unit Freehold Blocks (MUFBs)

• Green Finance: The bank offers "Green" finance products, which have a slightly lower rental rate for properties with a high Energy Performance Certificate (EPC) rating (A or B)

Pros and Cons of Gatehouse Bank Home Finance

Here is a balanced overview of the advantages and disadvantages of choosing Gatehouse Bank.

Pros:

• Shariah-Compliant & Ethical: The model is fully Shariah-compliant and avoids interest. The bank also has a wider ethical commitment, avoiding investment in sectors like gambling, alcohol, or arms

• Specialist Buy-to-Let: They are a market leader for BTL, especially for expats, international investors, and those using corporate (SPV) structures

• No Early Payment Charges (on BTL): Many of their Buy-to-Let products have no Early Repayment Charges(ERCs), offering significant flexibility for investors

• Good for First-Time Landlords: They are one of the few specialist BTL lenders that do not require an applicant to already own a residential property

Cons:

• Application Process: Some customer reviews, particularly for residential plans, mention that the initial application and background check stage can be "painful" and slow, with more back-and-forth than a conventional lender

• More Complex Legal process: The co-ownership model requires different legal documentation than a standard mortgage, which can be less familiar to some solicitors

• Rates/Rents May Be Higher: As a specialist lender, their rental rates may not always be as low as the "headline" interest rates from major high-street banks

Customer Service and Reviews

Customer service reviews for Gatehouse Bank are generally positive, particularly for its BTL service. Independent reviews from Islamic finance experts rate their products highly, often noting they are one of the cheapest and most flexible Islamic options on the market.

For residential customers, the service is described as professional and helpful, but some have noted that the application process can be slow and require perseverance. Their savings products are also well-regarded, with a smooth app and good rates.

How to Apply for Home Finance with Gatehouse

You can apply for a Gatehouse Bank Home Purchase Plan in two ways:

1. Directly: You can apply directly on the Gatehouse Bank website. The process begins with an online Decision in Principle (DIP), which takes about 10 minutes and does not impact your credit score. If successful, a qualified adviser from the bank will contact you to discuss your needs and guide you through the full application.

2. Through a Mortgage Broker: You can also use an independent mortgage broker who is on Gatehouse Bank's panel. This is highly recommended if you have a complex BTL application or if you want to compare their Shariah-compliant plan against other Shariah-compliant lenders or more conventional mortgages on the market.

As an approved intermediary for Gatehouse Bank we can help you to make an application, whilst ensuring they offer the best products available to you. Simply get started here to begin your journey.