Your Home Purchase Plan – a quick refresher

It’s easy to set up your home finance and then not think too much about it on a daily basis. However, checking in from time to time can be helpful, especially as your share in the property grows and new options may become available to you.

Here’s a reminder of how your Home Purchase Plan works, what your annual statement shows and a few areas that are worth keeping an eye on.

How co‑ownership works

Your Home Purchase Plan is built on a co‑ownership structure known as Diminishing Musharakah.

You bought your home in partnership with us, Gatehouse Bank, with each party now owning a share in proportion to your contribution. Over time, your monthly payments do two things:

• You pay rent on the bank’s share of the property
• Depending on your plan, you gradually buy more of that share, increasing your ownership.

As your share grows, the Bank’s share reduces until you own the property outright.

There’s no interest involved and the structure is independently overseen to make sure it’s Shariah-compliant.

Understanding your monthly payments

Your monthly payment is made up of:

• A rental payment, based on the bank’s remaining share and
• An acquisition payment, which increases your ownership in the property.

If you’re on a fixed rental rate, this will run for an agreed period before moving onto our Standard Variable Rate (SVR). Knowing when your current rate ends will help you to plan ahead.

What your annual statement tells you

Your annual statement gives a useful snapshot of how things are progressing. It shows:

• How much of the property you now own
• How much finance remains outstanding
• The rental rate you’re currently paying.

It’s a good opportunity to check how far you’ve come and whether your current arrangement still suits your circumstances.

Reviewing your options over time

As time goes on, you may find new opportunities become available to you.

For example:

• Switching your rental rate: Existing customers can switch to a new 2- or 5-year fixed rental rate up to three months before their current deal ends, using our online portal.
• Green product eligibility: If your property’s EPC rating has improved to A or B, you may be eligible for a green product when switching.
• Finance‑to‑Value (FTV): If your FTV has reduced, through overpayments, home improvements or changes in the property value, you may be able to access lower rental rates.

• Overpayments: Depending on your plan, you may be able to overpay up to 10% of your outstanding finance each year (subject to a minimum of £2,000), without incurring a charge during your fixed period.
• Payment flexibility: You can change the day your monthly payment is taken if that helps with budgeting.

Before making overpayments or switching your rental rent, it’s always worth checking whether any Early Redemption Charges apply.

Long‑term ownership, clearly structured

Your Home Purchase Plan is designed to support long‑term ownership in a transparent, ethical and structured way. Reviewing it now and then helps to make sure you’re getting the most from your arrangement and that it continues to reflect where you are today.

If you’d like to explore your options or need help understanding any part of your plan, our team is here to help.

We’re here to support you

Call: 08000 353 253 or +44 20 7070 6960 (if calling from outside the UK)

Email: gatehouse.servicing@gatehousebank.com

This article is for information purposes only and does not constitute financial advice. An independent financial adviser can help you decide what’s right for you.