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Mortgage Calculator: Stamp duty

Stamp duty is a frequently overlooked cost when it comes to calculating the cost of a property purchase. The bandings are as follows:
  • £0 - £125k = Zero
  • £125k- £250k = 1%
  • £250k - £500k = 3%
  • £500k - £1m = 4%
  • £1m - £2m = 5%
  • £2m+ = 7%
Simply enter your purchase price and your amount due will be calculated. (More information on stamp duty is provided in the guide below.)

Purchase price of property

 

Are you a first time buyer? What is a first time buyer?

Stamp duty on a property worth £ will be £

You have indicated you are a first time buyer, you will need to ensure you match the goverment criteria in order to benifit from the lower stamp duty band between £125,000 and £250,000

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Your home may be repossessed if you do not keep up repayments on your mortgage. The rates and products displayed within these tables are updated on a regular basis however due to the dynamic nature of the market some product details and rates may be out of date. We therefore do not take any responsibility for the accuracy of the information supplied within the table although we will always make our best endeavour to ensure that the information provided is as accurate as possible. You should always check rates and terms with the product provider. The telephone-based mortgage advice service is provided by TurnKey Mortgages Limited. Registered office: St Crispins House, Duke Street, Norwich NR3 1PD. TurnKey Mortgages Limited are authorised and regulated by the Financial Conduct Authority. Their FCA number is 537424.


Stamp Duty: What You Need to Know

 

If you buy property over a certain value anywhere in the UK, you are liable to pay Stamp Duty Land Tax (SDLT). The amount of tax varies according to the price that the property has sold for, whether the property is for residential or commercial use, and whether it is freehold or leasehold.

 

For residential use, stamp duty becomes due on property bought for over £125,000. Above this amount, it rises in bands, starting at 1%. Properties deemed to be in disadvantaged areas previously had a higher starting threshold of £150,000, but this was abolished in April 2013.

 

The Bands

£0 - £125,000 (0%)

£125,000 - £250,000 (1%)

£250,000 - £500,000 (3%)

£500,000 - £1,000,000 (4%)

£1,000,000 - £2,000,000 (5%)

£2,000,000+ (7%)

 

Once the property value falls into a band, the stamp duty rate applies to the whole value, not just the increment above the previous threshold. So, while a property bought at £125,000 incurs no stamp duty, a property bought at £130,000 incurs a 1% charge on the whole amount (£1,300).

 

Adding to a Mortgage

It is possible to add the cost of stamp duty to your mortgage, but there are two main disadvantages to doing so.

  • Firstly, the interest accrued on this additional amount over the lifespan of a mortgage is substantial.
  • Secondly, it may affect the loan-to-value tier that you had planned for your mortgage. If you’re planning to apply for an 85% LTV mortgage, you might find that the extra lending required to cover the cost of stamp duty pushes you towards a more expensive 90% LTV mortgage instead.

 

As always, we recommend that you seek professional advice if you are unsure which type of mortgage is right for you. All of the information provided above is for use as an overview only and should not be the basis for your mortgage decision.