A step-by-step UK guide to halal home finance, from DIP to completion, with eligibility, costs, timelines, and provider options explained in plain English.
Start your halal homebuying journey with confidence
Buying a home the halal way should feel straightforward and reassuring. In the UK, halal home finance avoids interest and uses asset-backed structures that align with Sharia principles. Instead of paying interest on a loan, you typically buy the property in partnership with the provider and pay an agreed rent on their share, gradually increasing your ownership. The process mirrors a conventional mortgage timeline but with a few important differences that protect both your faith and your finances.
The smartest first step is a Decision in Principle. This gives you a quick view of what you could afford without affecting your credit file. Providers such as Gatehouse Bank and StrideUp can often review the basics the same day. With that budget in hand, you can search for properties in England or Wales that fit your goals and move faster when the right one appears.
You will complete a detailed application only after you have an agreed property. Expect a structured call with a qualified adviser to run through your income, commitments and credit profile, followed by a property valuation and underwriting checks. If everything aligns, you will receive a formal offer that sets out the rental rate, product fee, term and conditions clearly. From there, specialist solicitors handle the legal work so completion can proceed smoothly.
Clear steps, transparent costs, and FCA-regulated support can make halal home finance feel as calm as a well-planned move.
A typical timeline from offer to completion runs 12 to 16 weeks. Most providers require at least a 20% deposit, though 5% options do exist. Age limits usually cap the term so it ends by age 75. With a realistic budget, organised documents, and an experienced broker or adviser, you can progress with certainty and avoid unnecessary delays.
Who this guide will help
This guide is written for UK consumers who want to purchase a home in a Sharia-compliant way, especially first-time buyers and movers in England and Wales. It is equally useful if you have been comparing conventional mortgages but prefer a halal structure, or if you are returning to the market after a pause and want a clear refresher on how the process works now. If you value transparent explanations, predictable steps, and practical checklists, you will find what you need here to plan confidently and act at the right time.
Your main choices today
- Home Purchase Plan with Gatehouse Bank - diminishing partnership structure with fixed or variable rental rates.
- Shared ownership style with StrideUp - buy a share, pay rent on the remainder, staircase over time.
- Offa (emerging option) - technology-led halal finance expected to streamline onboarding.
- Specialist halal mortgage brokers - compare HPPs and structures across providers for best fit.
- Remortgage to halal product - switch from conventional to Sharia-compliant where allowed, subject to valuation and fees.
Cost, impact, returns, risks
| Item | Typical cost or range | What it affects | Potential upside | Key risks or trade-offs |
|---|---|---|---|---|
| Deposit | Usually 20% of price; some 5% options | Affordability and monthly rent | Lower rent and stronger application | Smaller deposits can limit providers and raise pricing |
| Product fee | One-off, often £0-£1,999 | Securing your chosen product | Access to better rental rates | Payable upfront or added to finance increases total cost |
| Valuation | £250-£800+ depending on property | Confirms market value | Flags issues before you commit | Down-valuations can reduce finance amount |
| Legal fees | £1,200-£2,000+ plus disbursements | Conveyancing and Sharia compliance | Faster completion via panel solicitors | Extra complexity with three solicitors can add time |
| Rent rate | Provider specific; fixed or variable | Monthly payments | Certainty with fixed periods | Variable rates can increase costs over time |
| Early payment | Partial or full buy-out rules vary | Flexibility to own sooner | Reduce total rent paid | Early repayment charges may apply during fixed periods |
| Insurance | Buildings and life cover as appropriate | Protection for you and provider | Financial resilience for family | Additional monthly expense |
| Stamp Duty | Standard UK rules apply | Upfront purchase cost | First-time buyer relief where eligible | Budget impact at exchange and completion |
Can you apply - and will you qualify
Most halal providers support properties in England and Wales and require you to be at least 18 if resident in the UK, or 21 if applying as an expat. Terms typically end by age 75, which means your income and chosen term must fit comfortably within that window. Finance amounts frequently range from £75,000 up to several million for higher value homes, subject to affordability checks. Expect to share recent payslips or accounts, bank statements, proof of deposit, identification, and details of any credit commitments. A clean and consistent document set speeds up underwriting.
A 20% deposit is common across the market, although some products allow 5% with tighter criteria. Your credit history will be reviewed during the full application, but the initial Decision in Principle usually does not affect your score. If your situation is more complex, such as self-employment, multiple income sources, or a previous change in immigration status, a specialist halal broker can help position your case clearly. Services like Kandoo can introduce you to FCA-regulated advisers who compare suitable halal options and keep timelines on track.
Step-by-step - from budget to keys
- Get a Decision in Principle online without credit impact.
- Search and agree a property in England or Wales.
- Book a FactFind call with a qualified adviser.
- Submit documents, pay valuation, progress underwriting.
- Receive formal offer; review terms and product fee.
- Instruct panel solicitors for all parties without delay.
- Exchange contracts, pay deposit and legal fees.
- Complete, collect keys, start monthly rent payments.
Pros and cons at a glance
| Pros | Cons |
|---|---|
| Sharia-compliant, interest-free structure | Fewer UK providers to compare |
| Clear, transparent offer documents | Typically higher deposit expectations |
| FCA-regulated advice and consumer protection | Three-solicitor process can add complexity |
| Builds ownership over time via buy-outs | Variable rent rates can rise |
| DIP available quickly for budgeting | Valuation downshifts can limit finance |
Before you commit
Take time to model your monthly payments under both fixed and variable rental periods, and test what happens if rates rise. Confirm all fees upfront, including any product fee, valuation, legal costs, and potential early repayment charges during fixed terms. Ask how staircasing or partial buy-outs work in practice, and check whether overpayments reduce rent immediately or at set intervals. If you are choosing between providers, prioritise clarity of the formal offer and responsiveness during underwriting. Keep your documentation accurate and up to date, and let your adviser know promptly about any changes to your circumstances so your timeline stays on track.
Alternatives to consider
- Conventional mortgage with ethical screening if halal finance is unavailable.
- Shared ownership via housing associations with careful review of lease terms.
- Delaying purchase to grow deposit and improve affordability.
- Family support or gifted deposits with formal declarations.
- Renting short term while rates and savings improve.
FAQs
Q: What is a Decision in Principle and will it affect my credit score? A: A DIP is an initial affordability check based on your income and circumstances. It typically uses a soft search, so it should not impact your credit score.
Q: Do I need to find a property before applying fully? A: Yes. After your DIP, providers proceed with a full application only once you have a specific property, so the valuation and underwriting match the real purchase.
Q: How long does the halal home finance process take? A: From formal offer to completion, allow around 12 to 16 weeks. Receiving the formal offer itself often takes 2 to 4 weeks after your valuation and underwriting begin.
Q: How much deposit do I need? A: Many providers ask for at least 20%. Some products allow 5% deposits subject to stricter criteria and potentially higher pricing.
Q: Which UK providers offer halal home finance? A: Gatehouse Bank and StrideUp are leading options, with Offa emerging. Availability can change, so it is wise to compare with a specialist broker.
Q: Can I repay early or staircase faster? A: Usually yes, but check your product for specific overpayment limits and any early repayment charges during fixed rate periods.
Q: Are solicitors different for halal finance? A: You will typically have your own solicitor, plus the provider and the seller will have theirs. Using panel firms can keep things efficient and compliant.
What to do next
If you are ready to explore options, start by securing a DIP to understand your budget. Then speak with an FCA-regulated broker. Kandoo can connect you with vetted advisers who compare suitable halal products, explain the small print in plain English, and coordinate timelines so you can move from offer to keys with confidence.
Important information
This guide is general information, not personal advice. Product availability, eligibility and pricing change over time. Always check key documents and seek regulated advice before committing. Your home may be at risk if you do not keep up payments.
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