Can You Add Stamp Duty To Your Mortgage?

Want to avoid the number of payments you’re making when purchasing a property? Many property buyers wonder whether it’s possible to consolidate some house moving fees, and in this article we’re going to explore whether it’s possible to add stamp duty to your mortgage.

Is it possible to add stamp duty to your mortgage?

Stamp duty is payable within fourteen days of buying a property or piece of land.

It is possible to add stamp duty to your mortgage, but to do this you will need to increase your loan or reduce your deposit.

There are a few things to bear in mind before deciding to pay your stamp duty in this way.

By borrowing more money or reducing your deposit to cover the cost of the stamp duty, this will incur interest over the duration of the mortgage term. It will also affect your loan to value ratio (LTV). This essentially means that it is more expensive to pay your stamp duty in this way.

How much stamp duty do I need to pay?

Knowing how much stamp duty you need to pay may help you decide whether it’s worth paying the value with your mortgage.

Currently, there is a stamp duty holiday for first-time buyers in place, which is set to start phasing out from 30th June 2021. This applies to England and Wales, Scotland and Northern Ireland have their own stamp duty rates.

These will be the stamp duty rates from 1st July – 30th September 2021:

Up to £250,000 – no stamp duty
£250,001 to £925,000 – 5% stamp duty
£925,001 to £1.5m – 10% stamp duty
Above £1.5m – 12% stamp duty

Stamp duty rates after 1st October will return to the normal rate:

Up to £125,000 – no stamp duty
£125,001 to £250,000 – 2% stamp duty
£250,001 to £925,000 – 5% stamp duty
£925,001 to £1.5 million – 10% stamp duty
Above £1.5 million – 12% stamp duty

To sum up

A mortgage lender will not specifically loan additional funds to cover the cost of stamp duty. Therefore, before purchasing a property you either need to include stamp duty in your house moving budget, or request a slightly higher mortgage loan or reduction in your deposit to cover the cost.

Looking for expert advice on how much stamp duty you’ll need to pay and the best way to pay for it? The team of expert mortgage advisors are on hand to help. Get in touch to arrange your free initial consultation today.