Specialist lender Offa has dropped rates for its Sharia-compliant buy-to-let. products.
Offa’s two-year BTL rates have dropped up to 0.21%, and up to 0.24% for five-year products, with additional rate drops on tracker rate products. HMO and multi-unit freehold block (MUFB) product fees have also dropped from 1.5% to 1%.
Sagheer Malik, Chief Commercial Officer & Managing Director of Retail Finance, says: “We will continue to drop rates for our fast and easy Sharia-compliant BTL finance products whenever possible, always focusing on giving our customers the best deal.
“We are dedicated to bringing Islamic finance into the 21st century, leaving behind the onerous paperwork and cumbersome systems that many customers have typically suffered in the past. Our streamlined digital application process – which is unparalleled in the Islamic finance market – means clients can potentially get a fair decision within minutes, depending on credit rating and risk criteria.”
Offa, the first company to launch Sharia-compliant bridge finance in the UK, recently announced that first time buyers can now get BTL finance and the minimum age required dropped to 18-years-old.
BTL applicants will also only need to earn £18,000 per annum.
As part of the new criteria, portfolio clients are subjected to more realistic stress testing, based on the average of current five-year fixed rate products rather than standard variable rate – making large portfolio cases more viable.
Offa has also expanded opportunities for overseas clients, with British expats in Malaysia and Hong Kong also now eligible for Offa’s Sharia-compliant BTL finance.
Instead of using interest, Offa’s BTL product involves the Islamic finance principles of co-ownership-with-leasing.
Customers acquire the property in partnership with Offa and make monthly payments to increase their share, over time owning it.
Offa received £230 million of sharia-compliant funding for its BTL product, offering significant capacity for the business to expand and diversify its financial propositions in the UK property market.
The company follows an ethical finance model designed in accordance with Islamic finance principles, which means not charging interest and investment into sectors deemed harmful to society – such as alcohol, tobacco, animal testing and the arms trade.
This article is taken from Landlord Today