Gatehouse Bank Home Purchase Plan (Ijarah): how it works

A Gatehouse Bank home purchase plan is a Shariah-compliant alternative to a mortgage. Instead of lending you money and charging interest, the bank buys the property with you: your deposit is your share, the bank funds the rest, and you pay rent on the portion the bank still owns while buying that portion out over time. When the plan ends, the property is yours outright¹.

The version Gatehouse Bank currently offers to new customers is called Acquisition and Rent, and the bank describes it as the Shariah-compliant alternative to a conventional repayment mortgage¹. A second version, Rent Only, works more like an interest-only mortgage, but Gatehouse Bank says it is currently unavailable to new customers³.

Because the bank owns a share for part of the term, the legal set-up differs from an ordinary mortgage: the property is registered in the bank's name, and the bank instructs its own solicitor to work alongside yours during the purchase⁵. That is the single biggest practical difference to get your head around before you apply.

How the Gatehouse Bank Ijarah Home Purchase Plan works

The mechanics are straightforward once you separate ownership from payment. The bank purchases the property in partnership with you, and each of you owns a share. Your deposit is your stake; the bank funds the rest¹. You then buy the bank's stake over time, paying rent on the portion you do not yet own, and you own the property outright at the end of the agreement².

The bank holds the registered title of the property, but you and the bank jointly have the beneficial ownership, and on redemption the registered title is transferred to you¹⁰. In practice this means your name is not on the title register while the plan runs, even though you live there and have an ownership interest in it.

Your monthly payment reflects that split. It is made up of either rent alone, if you have a Rent Only plan, or rent and acquisition, if you have an Acquisition and Rent plan, and the rental rates reflect the shares owned by you and the bank⁵. As your share grows, the rent element falls away and the acquisition element does the work.

The first payment is not the same as the rest. Gatehouse Bank says it will be higher than the regular monthly payment, because it includes rent charged from the date funds were released to the end of the completion month, plus the regular monthly payment for the following month⁷. Budget for that first month separately.

Rent & Acquisition or Rent Only: the two versions of the plan

Gatehouse Bank's home purchase plans come in two shapes, and only one of them is open to new customers.

Acquisition and Rent is the Shariah-compliant alternative to a conventional repayment mortgage, where monthly payments of rent and acquisition payments increase your share until the property transfers to your name⁵. This is the version the bank provides to new customers, and it is the one described on its home finance pages¹.

Rent Only is the Shariah-compliant alternative to an interest-only mortgage: monthly rental payments with no acquisition payments, and an undertaking to acquire the bank's share at the end of the finance term⁵. Gatehouse Bank states plainly that the Rent Only finance option for Home Purchase Plans is currently unavailable to new customers³. If you already hold one, it continues; if you are applying now, it is not on the table.

The two behave differently if you pay extra. On an Acquisition and Rent basis, an Additional Acquisition Payment gives you the option to reduce the outstanding finance term by keeping the monthly payment the same; on a Rent Only basis, the monthly payment is reduced instead⁵. That is a meaningful difference: one shortens the plan, the other lowers the bill.

If you are weighing this against a conventional mortgage, the wider comparison is set out in mortgage or Islamic home purchase plan? and in home purchase plans: Islamic home finance.

How the monthly rent is set

The rent is not a fixed number plucked from the air. It reflects the shares owned by you and the bank, so as your share rises, the rent charged on the bank's share falls⁵. That is why the composition of your payment changes over the term even if the headline amount stays level.

Gatehouse Bank publishes its current rental rates on its own product pages and in its Home Purchase Plan product guide, and those figures change. The guide in force from 4 September 2026 sets out the refinance and home purchase ranges with initial rental rates for UK residents, UK expats and international residents⁶. Because the rates move, this page does not quote them: check the bank's site and the product guide for today's figures.

Two structural points matter more than the rate itself. First, all finance terms and fixed rate periods begin on the completion date of your home finance and end on the last day of the calendar month in which the term or fixed period expires⁴. A five-year fixed period starting mid-month therefore ends at a month end, not on the same date five years on.

Second, the plan is not priced like a loan with an interest rate attached. There is no interest, because the bank owns an asset and charges rent on it. What you are comparing between products is the rental rate, the term, the fees and the flexibility, not an APR.

Who can apply for a Gatehouse Bank home purchase plan

Gatehouse Bank splits its home purchase plan range by where you live, and the range you can apply for depends on your residency status rather than your nationality alone.

• UK residents apply through the standard home purchase plan range⁶.
• UK expats, meaning UK citizens resident abroad, apply through the UK Expat Home Purchase Plan products⁶.
• International residents, meaning foreign nationals who are not resident in the UK, are only eligible for the International Home Purchase Plan products⁶.
• British passport holders who do not have an automatic right to live and work in the UK are also restricted to the International Home Purchase Plan products⁶.

The products are available to UK residents, UK expats and international residents looking to purchase or refinance residential property across England or Wales¹¹. Note the territorial limit: the bank's home purchase plan range covers England and Wales, so a property in Scotland or Northern Ireland is not covered by these products.

There are hard exclusions. Gatehouse Bank will not provide finance to applicants with diplomatic immunity, and all applicants are checked against financial sanction and Politically Exposed Persons lists¹². Self-employed applicants can be considered with at least two years' accounts, subject to affordability¹¹. The bank also states that it does not currently offer finance for Right to Buy or Right to Acquire purchases⁴.

Fees and charges, including for settling early

Gatehouse Bank's home finance fees fall into a few recognisable buckets, and the amounts sit in its Tariff of Charges rather than on this page. The tariff for home and buy-to-let finance is effective from 1 April 2026¹³.

• Product fee. Charged on some products as part of the deal and deducted from the finance amount at completion; the bank directs you to your Purchase Plan Offer Letter for details¹³.
• Account settlement fee. Payable at the end of the plan to cover the bank's legal and administration costs, whether at the end of the full term or on any earlier settlement date¹⁴.
• Early Redemption Charge. Depending on the product chosen, this may be payable if you make Additional Acquisition Payments or redeem your plan during a Fixed Rental Rate Period⁴.

The Early Redemption Charge is the one to understand before you sign, because it can bite in two different ways: paying a lump sum down, and settling the whole plan early. The bank's tariff says it is payable during a Fixed Rental Rate Period if you make an Additional Acquisition Payment exceeding your terms or transfer to a different product, with details in your Purchase Plan Offer Letter¹³.

On sale, the arithmetic is specific. Gatehouse Bank says that when you sell, you pay the original cost of the property contributed by the bank, along with an account settlement fee and the Early Redemption Charge if applicable, less any acquisition payments you have made. Any increase in the property value benefits you⁴. That last point matters: you keep the upside on the whole property, not just your share.

Paying extra and settling the plan

Extra payments are built into the design of an Acquisition and Rent plan, because every additional acquisition payment increases your share of the property and reduces what the bank owns⁵.

Outside a Fixed Rental Rate Period, you can make Additional Acquisition Payments at any time, subject to a minimum payment set by the bank¹¹. During a Fixed Rental Rate Period, the allowance is different: on the buy-to-let purchase plan, an Additional Acquisition Payment can be made up to a percentage of the outstanding finance balance in each anniversary year¹⁵. Because the two rules sit in different documents, check which applies to your product and term, and ask the bank for the current minimum and the current annual allowance before making a payment.

What the extra payment does depends on your plan. On an Acquisition and Rent basis, you can choose to keep the monthly payment the same and reduce the outstanding finance term; on a Rent Only basis, the monthly payment is reduced instead⁵.

To settle the plan in full, you contact the bank to redeem. Gatehouse Bank says it will begin the process and send you a Redemption Request Email, including a link to the online redemption request form, which must be completed by the account holder with supporting documents¹⁰. The account settlement fee applies on redemption or settlement, as set out in the Tariff of Charges¹⁶.

If you are changing payment date, direct debit or payment method, the bank advises allowing a minimum of ten working days before your payment is due so the change takes effect for your next payment cycle¹⁷.

Your responsibilities while you live in the property

Living in a property you part-own with a bank carries obligations that an ordinary mortgage does not, and the two that catch people out are alterations and insurance.

On alterations, the rule is explicit. Gatehouse Bank says that when signing the finance agreement you agreed not to pull down, alter, add to or in any way interfere with the construction or arrangement of the property without the consent of Gatehouse Bank¹⁷. That covers more than knocking down walls: an extension, a loft conversion or a change to the layout all fall within it. Ask before you instruct a builder.

On insurance, suitable buildings insurance in place is a condition of the finance the bank provides⁸. Its homebuyer guidance adds that buildings insurance must be in place from exchange of contracts to cover the structure of the property⁷. If you are buying the property to rent it out, landlords buildings insurance is required instead, and if you are buying it to live in but it will be unoccupied for long periods, specialist buildings insurance may be needed⁷.

Beyond that, the ordinary costs of running a home sit with you. Comparable shared-equity schemes in Scotland and Northern Ireland set out the same pattern: the buyer is responsible for the mortgage, buildings and contents insurance, repairs and maintenance, council tax, heating, lighting and water bills, and fittings and furniture¹⁹. The same principle applies here: the bank's share does not mean the bank pays for the boiler.

Regulation, complaints and where to get help

Gatehouse Bank is authorised by the Prudential Regulation Authority and regulated by the PRA and the Financial Conduct Authority²³. Its firm reference number is 475346, its FCA status is Authorised, and it appears on the Bank of England's list of banks incorporated in the UK authorised to accept deposits²⁴. It has been trading since 2007²³.

Deposits with Gatehouse Bank are covered by the Financial Services Compensation Scheme, up to £120,000 per person and £240,000 for joint accounts¹⁷. If you hold a temporary high balance, for example money from a home purchase or sale, you may be entitled to more than £120,000 of protection for six months from when the amount was first deposited or legally transferred¹⁷. Note that this protection covers deposits, not the home finance plan itself.

If something goes wrong, Gatehouse Bank has an established complaints procedure, with details on its website complaints policy page⁴. If a complaint is not resolved through that internal procedure, you have the right to refer it to the Financial Ombudsman Service³. Customers with a complaint relating to a buy-to-let product also have the right to consult independent legal advice⁹.

For free, impartial help with money problems, MoneyHelper and the debt advice charities offer guidance at no cost, and the Financial Ombudsman Service handles unresolved complaints about firms it covers. If you are struggling with payments, tell the bank early rather than waiting: forbearance options exist, and the earlier a lender knows, the more options tend to be available.