Updated October 2026 · Fraser Bond
Finance · Alternatives
Interest-free ways to buy
IslamicHPPs
Familyloans
LISA25% bonus
Sharedownership
In short: There are no mainstream interest-free mortgages in the UK. Islamic home purchase plans avoid interest but charge rent on the provider's share, so costs are often similar. Real ways to cut borrowing costs include family loans or gifted deposits, the Lifetime ISA 25% government bonus for first-time buyers (on homes up to £450,000), shared ownership, and occasionally employer loans. Compare the total cost of each option.
Islamic home purchase plans
Ijara or Diminishing Musharaka; rent instead of interest.
Family loans
Agree terms in writing; lenders need to know.
Lifetime ISA
25% bonus on up to £4,000 a year.
Shared ownership
Buy a share and pay rent on the rest.
LISA bonus
Bonus earned–
Total before growth–
Must be first-time buyer, home up to £450,000.
Frequently asked questions
Is there an interest-free mortgage?
Not in the mainstream market.
Are Islamic mortgages cheaper?
Not always.
Buying your first home?
Talk to our team or get a free valuation.
Speak to our teamGet a free valuation
