Explore our approach to ethical home financing.
Get ahead with Primary Finance.
Fully Sharia compliant
Our products are fully Sharia compliant and have been reviewed by Sheikh Haitham Al-Haddad (Islamic Council of Europe). We believe in being ethical and acting with integrity in everything we do, with the ultimate goal of doing business to benefit everybody mutually.
Debt-free
Since you are under no obligation to purchase equity in any given month this means there is no debt. This also means no early or late repayment fees ever for not purchasing equity.
Pegged to housing market
The rent we charge has no relation to macroeconomic indicators such as interest rates. Instead it is determined by the local housing market and annual reviews are capped to reduce uncertainty.
Affordability
We sell you the property at the original purchase price, not current market value (unlike the government’s help to buy scheme). We will usually compare against our competitors when quoting to ensure we charge the most competitive rate possible.
True risk sharing
In case of a shortfall upon sale, proceeds are split according to respective equity shares (traditionally, bank has first call on proceeds and homebuyer may end up with nothing upon foreclosure).
Ultimate flexibility
Our product eliminates almost completely the risk of foreclosure by introducing an equity buffer. This allows you to pay us in equity if you cannot afford your rent. You can then purchase it back again once you are able to, in your own time.
Rent or Interest: What's the difference?
Consider the following two examples.
Example 1
- Ari lends £5,000 to Lina.
- Lina must repay Ari within 1 year – so Lina owes Ari a debt.
- Ari charges Lina interest for each day that any or all of the debt is outstanding.
- This is interest as it is a monetary charge upon a debt.
Example 2
- Sara and Hamida purchase a car together for £5,000 each.
- Both are equal owners in the car, so nobody owes a debt to anybody.
- Hamida does not use the car so she charges Sara rent each month for the right to use it exclusively.
- This is not interest as there is no burden of debt (Sara does not owe Hamida the £5,000; she is simply paying to use the car).
- If Sara was contractually obliged to purchase Hamida’s share then it would be considered a debt and the "rent" would be equivalent to interest.
What does it cost?
We give you complete control over your finances
The overall cost of your agreement is dependent on how you treat the product.
We recommend setting up a standing order to pay your target amount each month
Got questions?
What is the difference between this and an Islamic mortgage?
The key difference is that the Primary Finance Home Provision Scheme 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.
Who owns the property?
The property is owned by a special purpose company. This company is owned by you and our other investors. As your share of the company increases so does your ultimate ownership of the property, and your rent is reduced accordingly.
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.
