Yahoo News Can I borrow the stamp duty payment and add it to my mortgage?
Question: can I borrow the stamp duty I’m liable for as part of my mortgage?
Answer: The only buying cost which is routinely added to your mortgage is the arrangement fee, said Ray Boulger, senior technical director at John Charcol. But this doesn’t mean you can’t borrow more than you need to buy your first home and spend the extra on whatever you like.
Stamp duty is paid after you’ve completed on a property, and therefore after your mortgage money has landed, so it is feasible.
“The key is whether the affordability calculator says you can afford a slightly bigger mortgage,” said Boulger.
One thing to be careful of when considering borrowing extra – whether it is for stamp duty, furniture, renovations, or whatever you are thinking of – is that you don’t tip yourself into a higher interest rate bracket.
Interest rates depend on “loan to value” – the size of your deposit compared to what you are borrowing.
If you had a ten per cent deposit, for example, your loan to value is 90 per cent.
If you go for more money, but your deposit stays the same, then your loan to value status will get bigger.
However, interest rates usually go up in five per cent increments so you might well be able to borrow a few thousand more without penalty.
Your broker or mortgage lender will be able to advise.
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