Personal Finance

How much can you borrow on an Islamic mortgage?

Wondering how much you can borrow on an Islamic mortgage? Whether it’s your first home or your next home, it’s a natural question before you start contacting providers. We’ve done the hard work and spoken to industry contacts to get the figures for you.

Here’s the list of the main lenders and how much you can borrow with them. We’ll keep this updated regularly.

How much can you borrow with Al Rayan?

According to our industry contacts, Al Rayan typically give a multiple of 4.99 for a single applicant and 4.5 for joint applicants.

How much can you borrow with Gatehouse Bank?

Gatehouse typically operate on a multiple of 4.5 for both single and joint applications.

What does this mean for you?

You can calculate your expected loan as follows:

Single Applications

  1. Take your annual salary
  2. Work out your monthly commitments. Then multiply by 12.
  3. Subtract your annual salary from your annual commitments.
  4. Multiply that figure by 4.5 if you’re going with Gatehouse Bank or by 4.99 if you’re going with Al Rayan.

Joint Applications

  1. Take your annual salary
  2. Work out your monthly commitments. Then multiply by 12 to work out your annual commitments.
  3. Subtract your annual salary from your annual commitments.
  4. Multiply by 4.5 (this works for both Gatehouse Bank and Al Rayan).

Compare Islamic Mortgages

If you are in the market for an Islamic mortgage, you should check out our Islamic Mortgage Comparison tool.

 

6 Comments

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6 Comments. Leave new

  • Should I be getting a negative figure? could do with an example

    Reply
    • You should be subtracting your annual commitments from your annual salary – this will get your positive figure if your salary is greater than your commitments. I think brother Mohsin mixed up which should be subtracted from which

      Reply
    • I think there’s a typo. It says:

      “3. Subtract your annual salary from your annual commitments.”

      But it should be the other way. Subtract your commitments from your annual salary

      Here’s a rough example:

      Pre tax Salary: £45,600
      Monthly commitments: £50

      Multiply monthly commitments by 12: 12 x £50 = £600

      Subtract commitments from salary: £45,600 – £600 = £45,000

      Multiply that figure by 4.99 for Al Rayan or 4.5 for Gatehouse gives you: £224,550 and £202,500 respectively

      That’s the max you can borrow. Add on your deposit to see the max value of the house you can afford

      Reply
  • Jzk for the update.

    So the annual summary is that the pre-tax figure?

    Also in the monthly commitments would you include your current home mortgage payment, if one is looking for a replacement home?

    Reply
  • Could somebody confirm that Al Rayan offers a 4.99x multiple for single applicants? I phoned them today and they said it’s 4.5x for both

    Reply

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