Got questions? Start here
What is the difference between this and an Islamic mortgage?
The key difference is that the Primary Finance Home Purchase Plan is free from the burden of debt as we do not force you to buy our share from us, although you are free to buy it from us if you wish.
What is the monthly recommended level of equity purchase?
This is the amount of equity you would have to purchase each month to completely purchase our share by the agreed term. For example if we arrange £120k of finance for you over 10 years then it would be £1k per month.
Who owns the property?
You are the legal owner of the property from the start of the contract. We simply take a legal charge over it to protect our interest in the property. For pricing purposes we treat the property as though we are joint owners and calculate our share of the property based on the amount of money we have contributed.
How is rent calculated?
The rent we charge is based on how much it would cost to rent your property on an active local market, scaled down for our share of the property. We will usually give you a large rental discount in any month where you purchase the recommended level of equity.
How often is rent reviewed?
We conduct annual rental reviews. If local property prices in your vicinity have increased your rent will increase; if they have decreased your rent will decrease. The maximum increase or decrease is capped according to the terms in your offer letter. When calculating your affordability and providing you with an illustration we will make the assumption that rent increases by the maximum amount each year. In this way you can be confident that, as long as you stick to the recommended monthly payment, you will never pay more than the illustration although you may pay less.
What are the eligibility criteria?
To be eligible for finance you must pass our affordability assessment and not have any history of arrears or CCJs. You must also have a good credit score rating and be resident in the UK.
How do you assess affordability?
We assess your ability to be able to pay rent and purchase the recommended level of equity each month. To do this we look at your monthly income less outgoings to determine your net disposable income. This is then compared against the monthly payment to determine whether it is affordable for you. As a broad rule of thumb we would typically give finance for up to 4.5 times your household income, however this is not set in stone and we will consider each customer on their own merits.
How much finance will you be able to provide to customers?
This depends on how much money we are able to raise through our Qard Hasanah appeal. As a worst case: In our first couple of years we may need to take a low risk approach and limit the amount of finance we can arrange to a maximum of £100k per customer. In this case we will also require a minimum 50% deposit, but will look more favourably on applications where customers can provide higher levels of deposits. If we are able to raise our full £5m target through our Qard Hasanah appeal then we will be able to arrange higher levels of finance and accept lower levels of deposits. We therefore urge you to give as much Qard Hasanah as you can. Either way, we are seeking to get institutional funding within the next two years. Once we achieve this we expect to be able to arrange significantly greater levels of finance and accept deposits as low as 10-20%. The more Qard Hasnah we are able to raise and demonstrate, the faster we should be able to get institutional funding. Please see our Support Us page for further details.
If I choose not to purchase the recommended level of equity in any month, will my payment be lower?
If you only pay rent in any given month you will not be eligible for any rental discount in that month. However, we would still generally expect your rent-only payment to be less than your monthly recommended payment of rent plus equity.
What happens if I can’t afford my monthly payment?
Since equity purchase is optional, if you can’t afford to pay rent plus equity in any month, you can choose to only pay rent. If you cannot afford to pay rent we will usually allow you to trade some of your equity instead, to the value of the rent that you owe. In this way as long as you have equity in the property you will be protected and we will not consider it a default.
How long can I continue trading equity if I cannot afford to pay rent?
We will usually allow you to continue to do this for as long as you need to as long as you have a genuine need to do so and we believe there is a reasonable chance you will be able to start making payments again within a reasonable timeframe. As a responsible finance arranger we will suggest that you should speak to a financial adviser and consider alternative options if we believe it will be detrimental to you to continue trading your equity with us.
Can I buy more equity than planned?
We usually allow you to purchase as much equity as you like in any given month, with no fines or fees for doing so. However, for large amounts we may require a notice period, as described within our standard terms and conditions.
What happens if there is a loss on the property?
As we are partners in the agreement we will usually share the loss according to our respective shares in the property, as long as you have not breached the terms of your agreement and taken reasonable measures to avoid a loss being incurred. The property must only be sold for a loss if we both mutually agree to do so as partners.
How is any profit split if I sell my property?
As long as you have completed at least half of the term on the agreement we will usually give all of our share of the upside to you, minus any costs we may incur as a result of the sale, and subject to our standard terms and conditions. If you have completed less than half the term on your agreement we will usually take a sliding scale of our share of the profit. The exception is if you are simply moving home and wish to transfer your finance with us to your new home; in this case we will usually still give you our share of the profit.
How does Primary Finance make money?
We make money mostly from the rent that we charge. We may also take some of our share of the profit if you sell your property early on in your agreement.
What’s the catch?
There isn’t one! We simply believe that a better solution exists to home financing, which is fairer to the homebuyer, and that’s what we have created.
I already have a mortgage. Can I remortgage with Primary Finance?
Yes, we can support people looking to remortgage; in fact we encourage it!
I have a Right-To-Buy on my council property. Can you still support me?
Yes. As you are the legal homeowner we can support Right-To-Buy customers.
I would like finance to purchase an investment property. Can you help me?
Not right now. Initially we will be focussing on arranging finance for individuals wishing to purchase their own homes to live in. We intend to support buy-to-rent customers in the future.
Is it really worth me supporting this?
Imagine any idle money currently sitting in your bank savings account and not being used. If you took a thousand pounds (or possibly more) out of it for the next few years perhaps the impact on your life may not be significant. Now imagine being able to live the rest of your life without the burden of debt over your shoulders, never having to worry about the security of your home, and passing a debt-free legacy on to your children. The impact of that on your life could be enormous! We believe that is a future worth supporting with whatever idle money you have, and we hope you will agree enough to support us. Remember, we will pay your money back as it is a loan and not a donation. By supporting this initiative you can help bring about a brighter financial future for those people you hold dearest, and society as a whole.
What happens if I need my money back?
If you request all or part of your money back we will do our best to return it to you as quickly as possible. However, anything you give in excess of £10k will be reserved for your exclusive use, unless you specifically ask us to use it for financing other homes. Therefore if you need it back we will return anything reserved for you immediately upon request. If you withdraw part of your money leaving a balance below £10,000 within five years, you will lose your priority customer status. However, your priority customer status will not be affected by amounts we repay to you as part of our repayment plan or by you taking out finance with us.
I don’t need home finance. What do I get from supporting this?
Even if you don’t need finance to buy your own home, it is more than likely that some of your close friends and family members do. It is also more than likely that any children you or your loved ones might have will need finance to buy a home in the future too. By supporting this initiative you can help bring about a brighter financial future for those people you hold dearest, and society as a whole.
Why not just seek institutional funding rather than raising money in this way?
Institutional funding is an option we are already considering and discussing. However, we first want to give our amazing community of supporters the chance to support this initiative so that we can help them before anybody else. This will also enable us to have more meaningful conversations at the institutional level and be able to get funding without having to compromise on any of the ethical values that define us.
Will I get a signed agreement if I give some Qard Hasanah?
Yes. You will receive a draft agreement immediately to your email inbox, and a final signed agreement once your payment clears and gets marked as paid.
Does giving qard hasanah guarantee I will get finance if I apply?
Not necessarily. All finance is arranged subject to our eligibility criteria being met. Please see the FAQs under the How It Works page for information on eligibility criteria.
What if I give more than £10k?
Anything you give in excess of £10k will be reserved for your exclusive use, unless you specifically ask us to use it for financing other homes. If you need it back we will return anything reserved for you immediately upon request. We encourage you to give as much Qard Hasnah as possible to help us demonstrate a successful launch when having institutional level conversations.
What are the waiting times for getting finance?
Waiting list times depend on the amount of finance required and whether or not you are able to support our Qard Hasanah campaign. For current waiting times please get in touch as these may change according to demand and the level of support we receive for our campaign. Our time frames should reduce once we obtain institutional funding, which we expect will happen much quicker the more Qard Hasnah we are able to raise. We therefore urge you to give as much Qard Hasanah as you can. Remember, anything you give in excess of £10k will be reserved for your exclusive use and you can request it back at any time, however the more you give the sooner we expect to be able to get institutional funding even if you request it back.
Will I get a signed agreement if I give some Qard Hasanah?
Yes! If you successfully refer somebody else to give us £10k or more of Qard Hasanah you have helped us as much as if you gave it yourself. Therefore, we want to prioritise helping you in return also.
How can I refer somebody?
Simply send us the name of the person you are referring in an email or via the website contact form, and ask them to state that you have referred them when they fill out their payment form.
If I support this initiative how will you seek to help me before others?
When you support us with any amount of Qard Hasanah we will log your contribution. Regardless of how much you are able to support us with, we will actively seek to contact you ourselves to discuss your needs, and then be in touch as soon as we have the means to support your home purchase. If you apply to us for finance we will match your details to our log and prioritise your application ahead of individuals who supported us after you, or less than you. There are also a limited number of priority customer spaces if you give £10k or more Qard Hasanah; priority customers get the highest priority on the list. We will also offer you our best available rate, reserved exclusively for priority customers. Priority customers are prioritised according to the date they give qard hasanah.
How and when will you repay my money?
We will return your Qard Hasanah to you in annual instalments as we receive revenues from our home financing activities. We expect to be able to return the full amount to you within 3 to 5 years.
If I take out home finance with you before receiving all of my money back can I use it towards my deposit?
Yes. Whatever money we have not yet paid back to you can be used towards your deposit.
Still got questions? Get in touch