Islamic Bank Offers Buy to Let Loans for First TimeMake Text Bigger
Islamic Bank of Britain has joined the throng as the latest lender to offer buy to let mortgages to landlords.
The IBB will consider applications from landlords of any faith for a Sharia-compliant mortgage.
The mortgage package is a 75% loan-to-value deal at 5.49% variable with a 1% arrangement fee.
Limits on lending include a maximum of five properties per landlord portfolio, a property value of no more than £500,000 outside London and £750,000 in the capital.
The loan to value on homes in London worth over £500,000 drops to 65%.
Speaking for the bank, Simon Walker said: “Buy-to-let is popular with investors again. Rental yields are increasing and property is seen as a good long-term investment. IBB’s Sharia compliant purchase plan will help fuel this growing sector by catering for landlords looking for Sharia compliant finance.”
As a Sharia product, IBB’s lending is based on joint ownership and rent. The landlord and bank buy the property jointly and the monthly payment increases the customer’s share in the property and includes rent on the share that the bank owns.
At the end of the term the customer will own the property outright.
Leeds Building Society has fee-assisted buy-to-let mortgages, with rates starting from 4.49% fixed for two years at 60% loan to value – rising to 4.99% at 70% loan to value.
Interest rates on fee-paying deals are also down by up to 0.40%.
Included are a free valuation up to £335 and free in-house legal services for standard remortgages.
Phil Coombes, head of intermediary sales at Leeds BS, said: “The society is benefiting first-time landlords, who may require help with up front costs, by offering market leading fees assisted deals across two, three and five-year periods.”
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