Can high loan-to-value mortgage deals balance the stamp duty tax?

high loan-to-value

High loan-to-value mortgage deals returned to the market at the end of 2020. Through January we have seen more lenders follow this lead with more 90% loan-to-value products readily available. As borrowing becomes more accessible to buyers with smaller deposits, new energy can be seen in the market. The property market is currently focused on the upcoming deadline of the stamp duty holiday on 31 March. As many are hesitant about what the future holds for their purchases, it can be easy to overlook other ways of benefitting.

High loan-to-value mortgage deals: How can they help after the stamp duty holiday deadline?

A high loan-to-value mortgage product allows you to put down a smaller deposit for the value of a property. Many are now facing additional costs that will be incurred following the stamp duty holiday deadline. Now, buyers are looking for different ways to alleviate the extra charges, with high loan-to-value mortgages being a viable option. At present, the average price to buy a property is £245,000 in the United Kingdom. An 80% loan-to-value mortgage rate would ask for an upfront deposit of £49,000 for a property of this value. A slightly higher rate of 85% would require a deposit of £39,750, giving you 5% of the deposit that you can set aside. A 90% rate would enable you to put down a deposit of just £24,500, meaning you can put aside half of your original deposit!

Look at it from a different perspective…

Looking at the market from a different perspective can bring fresh ideas. Although the stamp duty holiday deadline is a delicate subject in the market right now, it is not the only solution. By borrowing more money at a lower rate, you can make a smaller upfront payment when it comes to the deposit. Using less of your savings for the deposit will give you funds to compensate for the additional stamp duty tax. You can also have money left over to buy furniture or redecorate the property after you move in!

How can Move Home Hub help?

If you have found the property of your dreams, you will want to know how much your purchase will cost. You can get a free, online conveyancing or survey quote from Move Home Hub in seconds! Our estimator tool will tell you upfront exactly how much buying your dream home will cost. All our quotes come with a no move, no legal fee guarantee to give you added protection. Begin your property purchasing journey by getting your free, online quote today!

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