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Can a mortgage cover Stamp Duty?

Does your mortgage cover Stamp Duty? Ask the experts!

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: May 18, 2022

There are a few factors which may affect how much Stamp Duty you will be charged, including where you live, the market value of the property you want to buy and whether you’re a first-time buyer. These things will impact your ability to stretch your funds to cover the Stamp Duty.

So first of all, let’s look at how the rate of Stamp Duty differs throughout the UK.

England and Northern Ireland have the same rates whilst Scotland and Wales charge different rates altogether.

See the tables below for a comparison of how Stamp Duty rates differ in the UK.

England and Northern Ireland

House Price Threshold Standard Stamp Duty Second Property Stamp Duty Rate
Up to £125,000 0% 3%
£125,001-£250,000 2% 5%
£250,001-£925,000 5% 8%
£925,001-£1.5 Million 10% 13%
£1.5 Million+ 12% 15%

Based on the Stamp Duty rate in England, If you were to purchase a property for £300,000, you would be charged £5,000 in Stamp Duty.

Although your own personal and financial situation can affect the rate you are offered by a lender, whilst many will go higher, the majority of lenders will consider providing loans with at least an 85% LTV rate.

So with that in mind, to purchase a property worth £300,000, a buyer would need a 15% deposit of £45,000 as well as funds for Stamp Duty, which in this example would equate to £5,000.

A mortgage lender will not loan additional funds to cover the cost of Stamp Duty so before purchasing a property you either need to have sufficient equity or money set aside specifically to cover moving costs including removal fees, solicitors fees and of course Stamp Duty.

Understandably, not all borrowers are in the position to have money set aside for such costs but there is potentially another option.

If possible, a buyer could reduce the amount of deposit they put down, with the funds saved being used to cover the stamp duty.

A key point to remember though is that by reducing the amount of deposit you put down, you will need to apply for a larger mortgage. This can reduce your choice of lenders as some may require a larger deposit depending on your circumstances.

Working with a mortgage broker can help to overcome some of these hurdles as they will have access to hundreds of lenders across the UK, some of whom may accept lower deposits or provide higher mortgages.

Make an enquiry to discuss your options and find out more.


In April 2015, Stamp Duty was abolished in Scotland and replaced with Land and Buildings Transaction Tax (LBTT).

Although many of the fundamental features of each tax system are similar, there are differences in the rates that are charged.

Portion of Property Price Standard Stamp Duty Rate Second Property Stamp Duty Rate
£0-£145,000 0% 4%
£145,001-£250,000 2% 6%
£250,001-£325,000 5% 9%
£325,001-£750,000 10% 14%
£750,001+ 12% 16%

Based on the above rates, if you were to purchase a property worth £200,000 as a buyer in Scotland, you would pay £1,100.00 in Stamp Duty.

So, for those asking “will a mortgage cover Stamp Duty in Scotland?” effectively no.

If a lender agreed to loan you 85% of the property price, you would still need a 15% deposit of £30,000 plus the additional £1,1000 for Stamp Duty.

With that being said, a lower rate of Stamp Duty could allow a borrower to save money and therefore use it to put a larger deposit down which in turn could mean that they have a wider range of lenders and interest rates to choose from.

Can your mortgage cover stamp duty if you’re a first-time buyer?

The rate of Stamp Duty that you will be charged can also vary depending on whether or not you are a first-time buyer.

The good news is that first time buyers in England and Northern Ireland are exempt from paying Stamp Duty on the first £300,000 of their property if it is valued under £500,000.

So, if you are a first-time buyer in England looking to purchase a property for £200,000, you won’t be charged any Stamp Duty.

Can you pay for stamp duty with your mortgage if the property is a second home?

If the above property worth £200,000 was purchased as a second property, you would be liable to pay £7,500 in Stamp Duty charges.

3% of Stamp Duty would be charged on the first £125k, and 5% on the remaining £75k.

So, if a lender agreed to loan you 85% of the property price, can you pay for stamp duty with your mortgage?

In this instance, the answer would be no. Your loan would cover 85% of the sale price of your new home, so you would still need a 15% deposit of £30,000 plus the additional £1,500 for Stamp Duty.

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How can I get a mortgage to cover Stamp Duty?

In order to get a mortgage that includes the cost of your Stamp Duty, you will need to apply for a larger loan.

Another alternative would be to reduce the size of your deposit. This wouldn’t allow you to use your mortgage to cover your Stamp Duty, but it would reduce the amount you have to pay upfront. Depending on your circumstances, it can be tricky to find a lender that will accept smaller deposits but that certainly doesn’t mean it’s impossible. Visit our low deposits section or speak to an advisor for more information.

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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