{"id":23242,"date":"2026-09-18T22:57:38","date_gmt":"2026-09-18T21:57:38","guid":{"rendered":"https:\/\/yatirim.uk\/tr\/ingilterede-faizsiz-mortgage\/"},"modified":"2026-09-20T10:47:03","modified_gmt":"2026-09-20T09:47:03","slug":"ingilterede-faizsiz-mortgage","status":"publish","type":"page","link":"https:\/\/yatirim.uk\/en\/ingilterede-faizsiz-mortgage\/","title":{"rendered":"Can You Buy a Home in the UK with an Islamic (Interest-Free) Mortgage?"},"content":{"rendered":"
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Can You Buy a Home in the UK with an Islamic (Interest-Free) Mortgage?<\/h1>\n

Yes. Islamic banks in the UK offer Home Purchase Plans based on co-ownership and rent rather than interest, and these products are also open to people living abroad.<\/strong> The bank buys the home together with you; you pay rent on the bank\u2019s share and gradually buy that share. For buyers living abroad the main option is Gatehouse Bank: it finances homes in England and Wales, lends up to 75% of the price on new build flats and requires applicants living abroad to earn at least \u00a325,000 a year.<\/p>\n\n

How it works<\/h2>\n
Model<\/th>How it works<\/th>Ownership<\/th><\/tr><\/thead>
Diminishing partnership<\/strong> (diminishing musharaka)<\/td>You buy the home together, you with the deposit and the bank with the rest. You pay rent on the bank\u2019s share and buy part of it every month, so the bank\u2019s share and the rent fall over time.<\/td>Shared; fully yours at the end of the term<\/td><\/tr>
Ijara<\/strong> (lease)<\/td>The bank buys the home and leases it to you. You pay rent and pay the capital separately or at the end of the term, then take over ownership.<\/td>The bank during the term, you at the end<\/td><\/tr><\/tbody><\/table><\/div>\n

In both models your payment is defined as rent, not interest. The rental rate is set by market conditions and in practice is close to, and often slightly above, the rate on a comparable conventional mortgage.<\/p>\n\n

Options for people living abroad<\/h2>\n
Provider<\/th>Open to<\/th>Key conditions<\/th><\/tr><\/thead>
Gatehouse Bank<\/strong><\/td>UK residents, UK expats and international residents<\/td>Homes in England and Wales; minimum finance \u00a375,000; up to 75% on new build flats; minimum income \u00a325,000 a year for applicants abroad<\/td><\/tr>
Al Rayan Bank<\/strong><\/td>Residential and buy to let purchase plans; confirm the conditions for overseas applications with the bank<\/td>Minimum finance \u00a3200,000; up to 75% of the price<\/td><\/tr><\/tbody><\/table><\/div>\n

For buy to let purchases the deposit is usually 25% to 35%. Product terms change often; confirm the current criteria with the provider or a mortgage adviser before applying.<\/p>\n\n

Is stamp duty paid twice?<\/h2>\n

No. Although the co-ownership model involves two transfers in theory (seller to bank, bank to you), the UK\u2019s alternative finance rules mean stamp duty is paid only once. The rates are the same as for a conventional mortgage purchase: a buyer who lives abroad and owns a home in another country pays the 5% higher rate for additional dwellings and the 2% non-resident surcharge on top of the standard rate. For your own figure, use our stamp duty calculator<\/a> .<\/p>\n\n

Tax on rental income<\/h2>\n

If you let the flat, the rent element you pay the bank is treated like interest for tax purposes. For individual landlords, finance costs are not deducted from income; instead a 20% tax credit applies, and the same rule applies to Islamic plans. Details are on our How much tax is paid on rental income in the UK<\/a> page.<\/p>\n\n

Is it permissible?<\/h2>\n

This is a religious question and we do not give religious rulings. The products of UK Islamic banks are offered with the approval of their own Sharia supervisory boards and are regulated by the Financial Conduct Authority (FCA). We suggest showing the product structure and contract to your own religious adviser.<\/p>\n\n

Who it suits<\/h2>\n