Islamic mortgage fees and early repayment charges
Beyond the rate, expect an application fee of £149 or none, a product fee of £0 to £1,249, a valuation fee that rises with the property's value, legal fees, and a settlement fee of £250 to £400, plus VAT at one provider, when the plan ends. Most fixed-rate products also charge 1% to 5% of what you repay if you leave or overpay beyond the allowance during the fixed period. The three mainstream providers publish different amounts for almost every one of these, and the table below sets them side by side.
How to read this page
- It covers the UK-resident home purchase plans of Gatehouse Bank, Offa and StrideUp. Expat, international and specialist pricing differs; murabaha products are covered on the murabaha page.
- Product fees and early repayment charges come from the rate records, checked 9 October 2026. Everything else comes from each provider's tariff of charges, read 16 October 2026.
- Fees attach to products. Read the offer letter for the product you are actually offered; it governs.
What fees does an Islamic mortgage have?
Up to eight, in three moments: before completion (application, product, valuation and legal fees, and a transfer fee), during the plan (an early repayment charge if you leave or overpay too much, and a fee to switch product), and at the end (a settlement fee and the legal cost of releasing the provider's interest). Each mainstream provider publishes them in a tariff of charges, and they differ on almost every line.
| Fee | Gatehouse Bank | Offa | StrideUp |
|---|---|---|---|
| Application fee | £149 for UK residents, charged even if the application is unsuccessful or withdrawn; none on its refinance-only range | £149, paid upfront at application | None in its tariff list, which states that a charge not listed is not charged |
| Product fee | £0, £499, £999. Deducted from the finance amount at completion | £499, £999. Payable on completion, paid directly or deducted from the finance sent to the solicitor | £1,249. Paid when you accept the offer; if eligible it can be added to the balance and the cash returned in the completion funds |
| Valuation fee, on a £300,000 home | £344, rising with value | £310, rising with value | £300, rising with value |
| Legal fees | You instruct and pay your own solicitor. The bank instructs its own and pays their standard fees | One solicitor acts for you and Offa jointly, and you pay their fees | You pay your own solicitor and StrideUp’s: £385 plus VAT and disbursements, reduced by £250 if your solicitor is on its panel |
| Funds transfer | None listed | £30 funds transfer fee | £42 CHAPS transfer fee |
| Early repayment charge | 2-year fixed: 2%, 1%; 5-year fixed: 3%, 3%, 2%, 2%, 1% | 2-year fixed: 2%, 1%; 5-year fixed: 5%, 4%, 3%, 2%, 1%; Discounted variable: none | 2-year fixed: set in the offer letter; 5-year fixed: set in the offer letter |
| Switching product | A retention product fee, set in the retention offer letter | £250 product switch fee | The before-completion fees may apply again |
| When the plan ends | £400 account settlement fee, at the end of the term or on earlier settlement | £250 account settlement fee, plus the solicitor’s charges for redeeming the legal charge | StrideUp’s legal redemption fee of £400 plus VAT, waived at the end of the contractual term, plus your own solicitor |
Product fees and early repayment charges: UK-resident products in the rate record, checked . Everything else: Gatehouse Bank, Tariff of Charges for Home and Buy-to-Let Finance, effective 1 April 2026; Offa, Tariff of Charges for Home Purchase Plans; StrideUp, Tariff List, 1 July 2026, read .
How much is the product fee, and can you add it to the finance?
Product fees on the mainstream UK-resident products run from £0 to £1,249, and within one provider the fee usually rises with the share financed: Gatehouse Bank and Offa both charge £999 on their products above 80% finance-to-value and £499 at 80% and below. The eight products with no product or application fee at all are Gatehouse Bank's refinance-only range, so a buyer cannot choose one. StrideUp publishes one product fee, £1,249, on both its fixed options.
A flat fee weighs more on a smaller amount of finance, and a lower rate with a larger fee can cost more over a two-year deal than the reverse. The calculator ranks products by the total over the fixed period for that reason.
Whether you can add the fee to the finance differs. Gatehouse Bank deducts it from the finance at completion, so the money reaching your purchase is smaller by that amount; your deposit has to cover the difference. Offa takes it directly or by deduction. StrideUp lets an eligible customer add it to the balance, but it is still paid when you accept the offer and the cash is returned in the completion funds, so you need it in hand first.
Valuation and legal fees
Every provider charges for its own valuation, which is for the provider, not a survey for you. All three scale it to the property's value, and at the same value they differ by tens of pounds rather than hundreds. The larger difference is legal: who acts for the provider, and who pays.
| Property value up to | Gatehouse Bank | Offa | StrideUp |
|---|---|---|---|
| £200,000 | £269 | £250 | £250 |
| £300,000 | £344 | £310 | £300 |
| £500,000 | £479 | £430 | £400 |
On legal fees, Gatehouse Bank has you instruct your own solicitor while it instructs and pays its own. Offa uses one solicitor acting for both of you, paid by you. StrideUp requires a separate solicitor on each side and you pay both: its own legal fee is £385 plus VAT and disbursements, reduced by £250 if your solicitor is on its panel, and £400 plus VAT more when the plan is redeemed before the end of its term. Ask for a conveyancing quote that names the provider, because a generic quote will not include the other side's costs.
Sources: the three tariffs linked under the table above, read . The full valuation scales run to £5 million in each document.
Early repayment charges on an Islamic mortgage
Of the 36 mainstream UK-resident products we hold, 32 publish an early repayment charge, 2 publish none, and 2 leave it to the offer letter. The published charges are a percentage of what you repay during the fixed period, from 1% to 5%, falling each year. The providers name it differently: an early redemption charge at Gatehouse Bank, an early buyout charge at Offa, an early repayment or early payment charge at StrideUp. The effect is the same.
What leaving in the first year costs, on a £200,000 balance
Figures behind this chart
| Provider and product | Published charge by year | Year 1 on £200,000 |
|---|---|---|
| Gatehouse Bank, 2-year fixed (12 products) | year 1: 2%, year 2: 1% | £4,000 |
| Gatehouse Bank, 5-year fixed (12 products) | year 1: 3%, year 2: 3%, year 3: 2%, year 4: 2%, year 5: 1% | £6,000 |
| Offa, 2-year fixed (4 products) | year 1: 2%, year 2: 1% | £4,000 |
| Offa, 5-year fixed (4 products) | year 1: 5%, year 2: 4%, year 3: 3%, year 4: 2%, year 5: 1% | £10,000 |
| Offa, discounted variable (2 products) | None | £0 |
| StrideUp, 2-year fixed (1 product) | See offer and tariff | Not published |
| StrideUp, 5-year fixed (1 product) | See offer and tariff | Not published |
Our calculation: the year-one percentage applied to a £200,000 balance repaid in full. Offa's tariff applies its charge to the outstanding balance; Gatehouse Bank's notice bases it on the amount of the finance redeemed early.
How much you can overpay without a charge
Gatehouse Bank allows additional acquisition payments of up to 10% of the outstanding balance in each anniversary year without a charge, in lump sums of at least £2,000; unused allowance does not carry over, and above it the charge applies to the excess. If you settle in full during the fixed period, the part within your unused 10% is not charged. StrideUp's tariff refers to an annual overpayment allowance and puts the figure in the offer letter. We did not find Offa's allowance in its rate card, criteria guide or tariff; its tariff lists a £25 fee for processing an extra acquisition payment.
When the charge is waived
Gatehouse Bank waives it when you switch to a new Gatehouse Bank product near the end of the fixed period, and refunds it if you take new finance of the same amount or more with the bank within three months. Its redemption page states that it cannot reduce or waive a charge that applies to your plan. Leaving for another provider is governed by the charge on the product you hold. The remortgage guide sets out the switch windows, which the bank publishes inconsistently.
Sources: Gatehouse Bank, introduction of early redemption charges and additional acquisition payments, 4 May 2023; Gatehouse Bank, how to redeem your property finance; the Offa and StrideUp tariffs above. Read .
Are early repayment charges on a home purchase plan regulated?
Not by the same rule as a mortgage. For a regulated mortgage contract, MCOB 12.3.1R allows an early repayment charge only if it can be expressed as a cash value and is a reasonable pre-estimate of the costs of the customer repaying early. The FCA's charges chapter applies to a home purchase provider only through MCOB 12.7, which is guidance: charges must be transparent, and unfair or excessive charges are inconsistent with the FCA's Principles and the Consumer Duty. Consumer contract law on unfair terms applies too.
The providers describe their own charges in three different ways. Gatehouse Bank's tariff says the charge covers its administrative and operational costs. StrideUp says its charge is a repricing of the equity it still owns rather than a penalty, and that its certifying scholar has reviewed it. Offa's tariff describes a charge for ending the plan early, calculated on the outstanding balance. None publishes how its percentages were set. Murabaha products, which are regulated as mortgages, fall under the stricter rule, as the murabaha page explains.
Sources: MCOB 12.3.1R; MCOB 12.1.2R, the table of who the chapter applies to; MCOB 12.7.1G; StrideUp, does StrideUp charge early payment charges. Read .
What we could not verify
- StrideUp's early repayment charge and overpayment allowance. Both are set in the offer letter, and neither its tariff nor its help centre publishes a scale.
- Offa's overpayment allowance. Not in its rate card of 1 October 2026, its criteria guide or its tariff, all read 16 October 2026. Not yet raised with the provider.
- What Gatehouse Bank's percentage is applied to. Its notice bases the charge on "the amount of the finance redeemed early" without stating whether a partial repayment is measured against the excess or the whole sum.
- How the percentages were set. No provider publishes the costs its charge is meant to cover. We have not yet asked.
Price products with their fees Current rates Are they more expensive?
Common questions about Islamic mortgage fees
- What fees does an Islamic mortgage have?
- The mainstream UK providers charge an application fee of £149 or none, a product fee of £0 to £1,249, a valuation fee scaled to the property value, legal fees, and a settlement fee of £250 to £400, plus VAT at one provider, when the plan ends. Most fixed-rate products also carry an early repayment charge if you leave or overpay beyond the allowance during the fixed period.
- Do Islamic mortgages have early repayment charges?
- Most do. Of the 36 mainstream UK-resident products we hold, 32 publish an early repayment charge, 2 publish none and 2 leave it to the offer letter. The published charges run from 1% to 5% of the amount repaid, falling each year of the fixed period.
- Can you overpay an Islamic mortgage?
- Yes. Gatehouse Bank allows additional payments of up to 10% of the outstanding balance in each anniversary year without an early redemption charge, in lump sums of at least £2,000. StrideUp sets an annual overpayment allowance in the offer letter. We did not find Offa’s allowance in its published rate card, criteria guide or tariff.
- Can you add the fees to an Islamic mortgage?
- It depends on the provider. Gatehouse Bank deducts its product fee from the finance at completion, so less of the finance reaches the purchase. Offa takes it directly or by deduction. StrideUp lets an eligible customer add its product fee to the balance, though it must still be paid at offer and is returned in the completion funds.
- Is the application fee refundable?
- Gatehouse Bank’s tariff states its £149 application fee is charged even if the application is unsuccessful or withdrawn. Offa’s £149 is paid upfront at application. StrideUp’s tariff list contains no application fee.