Halifax will cover the cost of stamp duty for some first time buyers — one of many deals that have made mortgages cheaper than ever for those lucky enough to qualify for one. Here, MoneySavingExpert.com analyses the offer.
The Halifax deal, which runs across all its residential mortgages until 7 July, pays the stamp duty on properties between £125,000 and £250,000 for first-time buyers only.
As you pay 1% of the property price in stamp duty on homes up to £250,000, this works out as up to £2,500 off (see our Stamp Duty guide for more on the tax).
In some cases, we found, the deal works well for borrowers, but it won't always. Therefore, it's crucial to do your sums as the property value, the amount you borrow, and any other fees can make it less attractive.
We compared Halifax's offer on two-year fixed mortgages against some of the top equivalent deals from other providers, as recommended by broker London & Country.
To give a decent spread, we compared £150,000 and £250,000 properties on mortgages where you can only borrow up 80% of the property's value (loan-to-value — LTV) as well as at 60% LTV.
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In three of the four cases, Halifax came out on top when you factor in the cost over the term, adding the mortgage admin fee and the cost of stamp duty (where applicable). But as it wasn't always best, it shows the importance of doing the sums.
|Provider||Property price||Rate||Fee||Stamp duty||Cost over two years + stamp duty|
|80% LTV mortgages|
|60% LTV mortgages|
|Nowich & Peterborough||£150,000||2.24%||£295(i)||£1,500||£11,003|
|Norwich & Peterborough||£250,000||2.24%||£295(i)||£2,500||£18,267|
(i) £200 cashback on deal completion, which has been taken off the total cost
David Hollingworth, from London & Country, says: "The up to £2,500 paid fee is nothing to be sniffed at and will offer great savings over two years, but you must factor in the overall value of the deal. The offer is attractive to first-time buyers but you can get better interest rates elsewhere."