The HPP is an Islamic alternative to a residential mortgage and Offa aims to deliver an offer to borrowers within an hour, subject to the applicant’s credit rating and risk criteria.
The company said the speed at which it could deliver an offer that beat the high street and was due to its paperless application process.
According to the HomeOwners Alliance, it takes around 2-4 weeks to process a standard mortgage application.
Offa first introduced its paperless application process to its buy-to-let (BTL) offering in 2024 to address the “cumbersome” process typically seen in the Islamic finance sector.
It uses a digital Know Your Customer (KYC) process, an automated valuation model (AVM) and digital checks of income and expenditure.
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The HPP allows a minimum deposit of 5% and borrowers can access finance up to seven times their income, subject to affordability and underwriting criteria. Family members can also help with payments.
The HPP also enables borrowers to use gifted equity so they can buy a property for a lower price than valued from family members. Offa will then use the full value for finance purposes, bypassing the need for a deposit.
Offa’s HPP allows customers to buy a property following Islamic ethical principles around finance, which forbids charging or paying interest.
Instead, this involves co-ownership with leasing, where customers buy the property in partnership with Offa and make monthly payments to increase their share and, over time, own the property.
The principles also prohibit investment in sectors deemed harmful to society, such as the arms trade, animal testing, gambling, alcohol and tobacco.
Sagheer Malik, chief commercial officer and managing director of home finance at Offa, said: “We are revolutionising the cumbersome world of Islamic finance – challenging and beating conventional high street banks on speed while also allowing family members to help with payments.
“For too long, Muslims seeking property finance that adheres to their faith have had to suffer slow finance decisions and mountains of paperwork. All that has changed today, because we are providing a truly modern Sharia-compliant product with a paperless application process and ultra-quick decisions. It will also appeal to non-Muslims who favour ethical finance.”
