Gatehouse Bank

Gatehouse Bank is a UK bank that sells two things: Shariah-compliant savings accounts and Shariah-compliant home finance. Its savings accounts work much like conventional savings accounts, except they pay an expected profit rate rather than interest, because Islamic finance does not permit the payment or receipt of interest¹. Its home finance covers buying a home to live in with a Home Purchase Plan, and buying property to let with a Buy-to-Let Purchase Plan².

There are no Gatehouse Bank branches. Savings are opened and managed online, with a Savings App for existing customers, and home finance is arranged through its direct advice team or through brokers. Money held in its savings accounts is protected by the Financial Services Compensation Scheme up to £120,000 per person, and £240,000 for joint accounts³.

Shariah-compliant savings: profit instead of interest

Savings accounts with Gatehouse Bank work like conventional savings accounts in most respects, with one important difference: because the bank is Shariah-compliant, it does not pay interest. Instead, it invests your funds in a portfolio of assets that comply with Shariah principles, and pays you a share of the profit⁸.

The reason lies in how Islamic finance views money. Neither the payment nor the receipt of interest is permitted under the Shariah principle that money should not be generated from money; instead, money should be put to good use through trade consistent with Shariah principles⁸. So rather than promising a fixed rate of interest, the bank targets an expected profit rate on each account. The bank acts as a trustee of depositors' funds and is accountable to depositors under Islamic principles of finance for any negligence⁸.

In practice, the difference matters most if the underlying assets underperform. Gatehouse Bank states that to date it has always managed to pay its customers the expected profit rate⁹. That is a track record, not a guarantee: an expected profit rate is a target rather than a contractual interest rate, and the same words appear across its product documents. Profit is paid gross, with no tax deducted at source, so any tax due is a matter for you and HMRC¹⁰.

Gatehouse Bank savings accounts and how withdrawals work

The savings range covers the main types most savers look for. The Easy Access Account is an instant access account: you can reach your online account around the clock and withdraw all or part of your funds to your nominated account, with unlimited withdrawals permitted¹¹. Notice accounts, such as the 95 Day Notice Account, require you to give that many days' notice before withdrawing¹². Fixed Term Deposits run for a set term, and you cannot withdraw funds before the end of the term other than in exceptional circumstances detailed in the product terms¹³. The Regular Saver Account does not allow withdrawals during its fixed period; at the end of that period your money and profit transfer to an Easy Access account¹⁴.

The Cash ISA range follows the same pattern, with an Easy Access Cash ISA and fixed term Cash ISA options, and all of its products accept transfers in from other ISA providers¹⁵. The Easy Access Cash ISA is funded from your nominated account, and transfers from existing ISAs you hold are permitted¹⁶. A separate maturity Easy Access Cash ISA account exists for ISAs coming to the end of a fixed term¹⁷. If you hold a Cash ISA, withdrawals are allowed, but withdrawals from a fixed term account within the term are subject to a reduction in profits⁹.

Money moving in or out of a savings account follows a daily cut-off: requests made before 1pm on a working day reach the account by close of business the same day, and requests after 1pm are transferred the next working day¹⁰. Notice and Easy Access accounts accept extra deposits at any time⁸. For a wider look at how these account types compare across the market, see our guide to savings accounts and our guide to ISAs.

Home Purchase Plans: how ownership and rent work

A Home Purchase Plan is Gatehouse Bank's Shariah-compliant alternative to a mainstream residential mortgage: instead of lending you money at interest, the bank buys the property with you and you acquire it over time². The ownership structure is the heart of it. The bank holds the registered title of the property, but you and the bank jointly hold the beneficial ownership; when the finance is finally redeemed, the registered title is transferred to you¹⁸.

Your deposit is your initial stake, and the bank funds the rest. You then make monthly payments: rent on the bank's share of the property, plus acquisition payments that build your own share if your account is on an Acquisition and Rent basis¹⁹. On a Rent Only basis you pay rent and make a separate arrangement to acquire the bank's share at the end. When the plan ends, the registered title is transferred to you¹⁸.

Gatehouse Bank does not offer finance for Right to Buy or Right to Acquire purchases²¹. It does not recommend any solicitor and is happy to work with a UK based solicitor of your choice, though it suggests one with experience of conveyancing involving Shariah finance, and can provide a list of firms it knows are experienced in home finance conveyancing²². For more on how this product works, see our page on the Gatehouse Bank Home Purchase Plan, and for the wider market, our guide to mortgages.

Buy-to-Let Purchase Plans and who can apply

The Buy-to-Let Purchase Plan is the same idea applied to investment property: a Shariah-compliant alternative to a mainstream Buy-to-Let mortgage, offered with both Acquisition and Rent products and Rent Only products²³. It is available to individuals, including employed, self-employed and contractor applicants, and to UK registered corporate entities including limited companies, LLPs and SPV (special purpose vehicle) structures²⁴.

The range is broad. Portfolios are welcome with no limit on the number of properties, and applications are considered from first time landlords as well as experienced ones. Houses and flats, including new build, are covered, as are HMOs and multi-unit freehold blocks with no upper limit on rooms or flats, though HMO and MUFB applications require at least 1 year of letting and financing landlord experience, and portfolio applications require either 2 years as a standard Buy-to-Let landlord or 1 year as an HMO landlord²³. Day one refinances from cash and bridging purchases are permitted, gifted deposits from immediate family, extended family and non-family members are accepted, and a rental top-up facility is available to UK residents, UK expats and international residents²³. The bank considers applications from residents in over 190 different countries²³.

Green home finance and the Woodland Saver scheme

Gatehouse Bank markets its home finance as green home finance, and runs a tree planting scheme tied to its savings range. Under the Woodland Saver scheme, the bank has an agreement with woodland project developer Forest Carbon to plant a tree for every Woodland Saver account opened or renewed, at no cost to the customer²².

The trees are planted within four specific UK woodland creation projects, and customers cannot choose which project their tree goes to. One project, the Lowther Whale Project in the Lake District National Park, can be visited²². The scheme is certified by the UK Government Woodland Carbon Code, which the bank says gives assurance that each woodland scheme will deliver the benefits claimed and that the woodland represents genuine new planting; projects are registered on the UK Land Carbon Registry²².

The scheme sits alongside the bank's wider environmental commitments: Woodland Saver accounts launched in February 2021, and the bank became operationally carbon neutral in October 2021¹⁰. Woodland Saver accounts are a variant of its fixed term savings range, so the withdrawal rules of the underlying account type still apply.

Fees and charges on home finance

Gatehouse Bank does not charge fees for advice to direct customers, and its advice covers only its own products²⁵. The costs you can face fall into a small number of categories, each set out in its home finance Tariff of Charges and illustrated in the Key Fact Illustration you receive before committing, including any broker fees associated with the finance product².

• Application fee: charged when you apply, with the amount depending on which of the bank's residency categories you fall into: UK Residents, UK Expats or International Residents².
• Valuation fee: charged for the property valuation, with the amount scaling with the property's value; a separate, lower re-valuation fee applies to Home Purchase Plans and single-dwelling Buy-to-Let, with other cases by arrangement².
• Account settlement fee: payable when you redeem or settle the finance; the amount is in the Tariff of Charges²⁶.
• Change of parties fee: charged for adding or removing someone from a Buy-to-Let Purchase Plan, and varies with the change and the associated legal costs².

Because fee amounts change over time, check the current Tariff of Charges on the Gatehouse Bank website, or read the Key Fact Illustration, which must show every fee payable on your specific application before you proceed².

Applying for home finance, switching and making extra payments

Savings applications are made online. You will need your address, the sort code and account number of an existing UK bank or building society account, an email address and a mobile number. You choose a product on the Savings page, follow the online application steps, review the terms and conditions and key product information, then submit and fund the account by bank transfer or cheque²⁶. Accounts cannot currently be opened through the Savings App⁸.

For home finance, the bank provides a full advice service for direct customers and can arrange for you to speak to a qualified adviser who can advise on the most suitable product if you already have a Home Purchase Plan²⁵. It can also consider applications for refinancing existing home finance from elsewhere⁸.

Existing home finance customers can make Additional Acquisition Payments to build their share faster. Outside a Fixed Rental Rate Period these can be made at any time; if you are switching to a new fixed rate product, any Additional Acquisition Payment must be made before the account is switched²⁴. The effect depends on the basis of your account: on an Acquisition and Rent basis you can choose to reduce the outstanding finance term while keeping the monthly payment the same, while on a Rent Only basis the monthly payment is reduced²⁴. Unless otherwise stated, the payment must come from a UK bank account held in the same name or names as the finance account²⁴. When a fixed rate period ends, you will be offered a product from the range available to new or existing customers, can revert to the bank's Standard Variable Rate, or can refinance to another provider²⁹. Switching to a new Gatehouse Bank product is done online, for which you need your 9-digit account number and a payment card for any applicable product fee, plus the permission of any other parties to the plan²⁷.

Managing your savings online and by app

Savings accounts are managed online around the clock, or through the Gatehouse Bank Savings App, which is available on the Apple App Store for iOS devices and the Google Play Store for Android devices, on iPhones or Android smartphones or tablets running the latest versions³⁰. The app can be used by any customer with a Gatehouse Bank online savings account²².

The app's functions are currently limited. You can use it to view your balance and transactions and to change contact details and marketing preferences, but you cannot open accounts in it, view accounts held with other providers, change your nominated account, or update your password there²². Access is via biometric touch or face login, or a 6-digit PIN created when you activate the app, and your login method is uniquely linked to the app on your device²⁰. The app has been designed to be compatible with screen reader and large text user preference settings³⁰.

The bank does not issue regular paper statements. You can view your balance and transactions at any time online or in the app; a closing statement is issued when an account closes, and paper copies are available on written request²⁸. If you forget your password, you will need your User ID and the registered email address; for a User ID reminder you will need your surname, your mother's maiden name and the registered email address. The password cannot be reset in the app, so contact the bank by telephone or request a reset through its website³¹. If you suspect fraud, contact the bank immediately by phone or email⁸.

Complaints and the Financial Ombudsman Service

If you are unhappy with any aspect of the service, contact the bank in the first instance. Savings customers can email info@gatehousebanksavings.com, call 0345 600 3350 from the UK or +44 191 622 1183 from outside the UK, or write to Gatehouse Bank, PO Box 861, Wallsend, NE28 5BP²⁸. The bank has an established complaints procedure, the details of which are on the complaints policy page of its website²⁹.

If a complaint cannot be resolved through the bank's internal complaints procedure, you have the right to refer it to the Financial Ombudsman Service, the free independent service that settles disputes between consumers and financial firms²⁸. For more on your rights when things go wrong, see our guide to consumer protection.

FSCS protection and who stands behind Gatehouse Bank

Money in Gatehouse Bank savings accounts is protected by the Financial Services Compensation Scheme, the UK's deposit protection scheme, up to £120,000 per person and £240,000 for joint accounts³. The FSCS protects money held by UK branches of authorised banks and building societies, and the "FSCS Protected" badge you see on Gatehouse Bank's pages indicates a PRA-authorised bank that is covered³³.

The bank behind the brand is Gatehouse Bank plc, authorised by the Prudential Regulation Authority and regulated by the PRA and the Financial Conduct Authority, with firm reference number 475346 on the FCA Register, where its status is shown as Authorised⁴. It appears on the Bank of England's list of UK-incorporated banks authorised to accept deposits⁵, it was incorporated on 25 May 2007 and was previously named Milestone Savings⁷, and it is a subsidiary of Gatehouse Financial Group Limited⁶. If the bank were ever to fail, eligible depositors would make a claim to the FSCS rather than to the bank itself; the FSCS also publishes a check facility for confirming what is covered³⁴.