Gatehouse vs Al Rayan vs StrideUp: Which UK Islamic Home Finance Provider for a £250k Purchase
If you are shopping for Islamic mortgage lenders in the UK in 2026, the practical shortlist for a residential purchase is short: Gatehouse Bank and StrideUp are the two active providers writing new Home Purchase Plans (HPPs), while Al Rayan Bank has paused new residential HPP applications and now focuses on buy-to-let and commercial finance. All three are FCA-regulated; the key differences are the contract structure, the minimum deposit, and who each one will actually accept — a UK first-time buyer, a UK expat, or an international resident.
The three providers at a glance
"Islamic mortgage" is a casual label — none of these are interest-bearing loans. They are Home Purchase Plans, a regulated product class the FCA has overseen since 6 April 2007. The bank or finance house co-owns the property with you; you pay rent on the share you do not yet own and buy out that share over time. The differences below are what matter when you sit down to choose.
| Provider | Structure offered | New residential HPP? | Min finance | Max FTV |
|---|---|---|---|---|
| Gatehouse Bank | Diminishing Musharaka HPP (partnership + lease) | Yes — active | £75,000 | Up to 80–90% FTV; 95% for first-time buyers/home movers |
| StrideUp | Co-ownership HPP (diminishing musharakah + ijara) | Yes — active | Lower entry; check current criteria | Up to 90% FTV (10% deposit product) |
| Al Rayan Bank | HPP (diminishing musharaka); now BTL & commercial focus | No — paused for new residential applicants (since Aug 2025) | n/a for new residential | n/a for new residential |
FTV = "finance to value", the Islamic-finance equivalent of loan-to-value (LTV). Figures verified against provider product pages and announcements as of June 2026. Always confirm current criteria on each lender's site before applying.
Deposit and finance-to-value: how much you actually need up front
For a £250,000 purchase, the FTV ceiling decides the smallest deposit you can put down:
- Gatehouse publishes HPP criteria up to 80% FTV as standard, with a maximum FTV reinstated up to 90% on selected products, and 95% FTV available to first-time buyers and home movers. Minimum finance is £75,000. On a £250k home at 90% FTV, you would need a 10% deposit of £25,000; at 80% FTV, £50,000. (Gatehouse HPP criteria)
- StrideUp traditionally started at a 15% minimum deposit but relaunched a 90% FTV product needing roughly a 10% deposit. On £250k that is about £25,000. (StrideUp 90% FTV relaunch)
- Al Rayan is not accepting new residential HPP applications, so it is not a deposit option for a new home purchase right now. (Al Rayan HPP page)
Rental rates in 2026 — and 2-year vs 5-year fixed
Because there is no interest, the "rate" you compare is the rental rate charged on the bank's share. Gatehouse's headline launch rates for its Home Purchase Plan were 3.75% initial rental rate for UK expats and 3.99% for international residents, and the bank has cut HPP rental rates by 0.50% in subsequent rounds and lowered two-year fixed rates again in early 2026 (Gatehouse launch announcement; Mortgage Solutions, Feb 2026). Treat any published figure as indicative — rental rates move, so confirm the live rate when you apply.
How to read a 2-year vs 5-year fixed
- 2-year fixed: the rental rate is locked for two years. Usually the lower headline rate, but you re-price (and may pay product fees again) sooner. Good if you expect rates to fall or your circumstances to change.
- 5-year fixed: a slightly higher rate in exchange for five years of payment certainty. Better if you value stability or think rates will rise.
- The trap: a lower 2-year rate can cost more once you add re-application fees and the risk of re-pricing into a worse market. Compare the total cost over the period you plan to stay, not just the headline percentage.
Worked Example
Aisha, 31, a UK expat working in Dubai, buying a £250,000 flat in Manchester to move home into within 5 years.
Aisha has £50,000 saved. Here is how she works through it:
- Deposit and FTV. £50,000 on a £250,000 home is a 20% deposit, so she needs 80% FTV = £200,000 of finance. That clears Gatehouse's £75,000 minimum finance comfortably and sits inside the standard 80% FTV tier.
- Provider fit. She is a UK expat, not UK-resident. StrideUp focuses on UK residents, and Al Rayan is not taking new residential applicants. Gatehouse explicitly serves expats, so it is her realistic lender.
- Rate. Gatehouse's expat HPP launched at a 3.75% initial rental rate. As an illustration only, rent on the bank's £200,000 share at 3.75%/year is about £200,000 × 3.75% = £7,500 in the first year (≈ £625/month), before her acquisition (equity) payments on top. The rent portion shrinks each year as she buys more of the property — that is the "diminishing" in diminishing musharaka.
- 2-year vs 5-year. Because she plans to stay ~5 years and wants certainty while abroad, she prices a 5-year fixed against the cheaper 2-year fixed plus an assumed re-application in year 3. If the 5-year premium is smaller than the expected re-pricing risk + fees, she takes the 5-year.
- Protection check. She confirms Gatehouse is FCA-authorised and that FSCS covers HPP advice up to £85,000 (the property funds themselves are not "deposits"). Her separate savings would be protected up to £120,000 — see below.
Outcome: Gatehouse is the only fit. Rates are illustrative — Aisha requests a live Decision in Principle before committing.
FCA regulation and FSCS protection — what is actually covered
This is the part most comparison pages get wrong, so read it carefully.
- FCA regulation. Residential Home Purchase Plans are regulated by the Financial Conduct Authority. Gatehouse Bank, Al Rayan Bank and StrideUp are all FCA-authorised for regulated HPP business. Note that buy-to-let HPPs are generally not FCA-regulated — StrideUp states its BTL product is not FCA-regulated. (FSCS — home finance)
- FSCS and your HPP. Since 6 April 2007 the FSCS has covered home purchase plans — but it covers advice, not the bricks. If you received bad HPP advice and the firm fails, you can claim up to £85,000 per person, per firm for failures on or after 1 April 2019. The money tied up in the property purchase itself is not an FSCS-protected "deposit". (FSCS official guidance)
- FSCS and your savings. Money in a savings or current account at an FCA-authorised UK bank is protected up to £120,000 per person, per firm — the limit rose from £85,000 on 1 December 2025. This matters for the cash you park before completion. (FSCS deposit limit increase; Bank of England)
Who each provider suits
| You are… | Best fit | Why |
|---|---|---|
| UK-resident first-time buyer | StrideUp or Gatehouse | StrideUp's 90% FTV (≈10% deposit) suits a smaller deposit; Gatehouse offers up to 95% FTV for first-time buyers/home movers. Compare live rates and fees. |
| UK expat (working abroad, UK property) | Gatehouse | Gatehouse explicitly serves UK expats (launch expat rate 3.75%). StrideUp focuses on UK residents. |
| International resident (no UK residency) | Gatehouse | Gatehouse offers an international-resident HPP (launch rate 3.99%). Few lenders touch this segment. |
| Buy-to-let or commercial investor | Al Rayan or Gatehouse | Al Rayan now focuses on BTL/commercial; Gatehouse also writes BTL. Remember BTL HPPs are usually not FCA-regulated. |
Free: the UK Halal Home Finance comparison checklist
The deposit, FTV, rate and eligibility checks to run before you apply — one page, plain English.
You're on the list — we'll be in touch.
Frequently asked questions
Is Al Rayan Bank still doing residential Islamic mortgages?
No. Al Rayan paused new residential Home Purchase Plan applications in 2025 and now focuses on buy-to-let and commercial property finance. Existing Al Rayan HPP customers are unaffected, but if you are buying a home to live in, Gatehouse or StrideUp are the active residential lenders. Always confirm directly on the Al Rayan HPP page.
What deposit do I need for an Islamic mortgage on a £250k home?
At 90% FTV (Gatehouse on selected products, or StrideUp's relaunched 90% FTV product) you would need about 10% — £25,000. At 80% FTV you would need 20% — £50,000. First-time buyers may access up to 95% FTV with Gatehouse, reducing the deposit to around £12,500. Check live criteria, as FTV tiers change.
Is my money protected by the FSCS with an Islamic bank?
Yes, but with a nuance. Savings or current account balances at an FCA-authorised UK bank are protected up to £120,000 per person, per firm (the limit rose from £85,000 on 1 December 2025). The FSCS also covers Home Purchase Plan advice up to £85,000 per person, per firm — but it does not protect the funds tied up in the property purchase itself, which are not a "deposit". See FSCS guidance.
What is the difference between a 2-year and 5-year fixed rental rate?
A 2-year fixed locks the rental rate for two years — usually cheaper up front but you re-price sooner and may pay fees again. A 5-year fixed costs slightly more for five years of certainty. Compare the total cost over how long you plan to stay, not just the headline percentage.
Are Gatehouse, StrideUp and Al Rayan all Shariah-compliant?
Yes. All three use Shariah-compliant structures — diminishing musharaka (partnership) combined with ijara (lease) — overseen by Shariah supervisory boards, with no interest charged. The bank co-owns the property and charges rent on its share. AAOIFI-style screening standards underpin the structures. Confirm each provider's current Shariah board and certification before applying.
Can a UK expat or international resident get a halal mortgage?
Yes — Gatehouse Bank is the main option. It serves UK expats (launch expat rental rate 3.75%) and international residents (launch rate 3.99%). StrideUp focuses on UK residents, and Al Rayan is not taking new residential applicants, so expats and international buyers will usually route to Gatehouse.
General information, not personal United Kingdom tax/legal advice. Verify with a qualified professional.
Sources: Gatehouse Bank HPP, Gatehouse launch announcement, StrideUp 90% FTV relaunch, Al Rayan Bank HPP, FSCS home finance, FSCS deposit limit, Bank of England — FSCS. Figures verified June 2026; rental rates and FTV tiers change — confirm live with each provider.