Recent months have seen the return of high loan-to-value mortgage deals to the market. These deals have been welcomed by buyers with a smaller deposit, as their prospective purchases become accessible once again. Fresh energy is sweeping the market as more lenders continue to launch high LTV mortgage products.
Although the deadline for the stamp duty holiday is looming, many are still calling for an extension. Following confirmation from the House of Commons that a debate was set to take place, it may now be delayed. As home-movers and industry professionals await further details, it can be easy to lose sight of the bigger picture. By looking at the stamp duty tax from a different perspective, you can find alternative ways to benefit.
How can high loan-to-value mortgage deals make a difference?
A high loan-to-value mortgage deal allows you to put down a smaller deposit on a property. With many facing additional costs from the additional stamp duty land tax, a high LTV deal can help balance that. Currently, the average house price in the United Kingdom is approximately £245,000. A lesser loan-to-value mortgage deal at a rate of 80% would require an upfront deposit of £49,000. An 85% rate would require a lower deposit of £39,750. Whereas a high LTV deal would ask for a deposit of just £24,500! That would save you the upfront cost of £24,500, solely from choosing a different mortgage deal. That is the value of mortgage deals such as these during these uncertain times. By having more mortgage options available, buyers will be able to afford a smaller deposit with the leftover funds compensating for the stamp duty charges.
It is time for a different perspective…
The stamp duty holiday succeeded in keeping the market moving, but it was launched only as a temporary relief. With the deadline of 31 March fast approaching, many are disheartened at the prospect of additional costs. However, we believe that is where high loan-to-value mortgage products can help. After working hard to save the money for the deposit, paying less of that upfront would free up funds to allow for additional charges. There could also be money left over to do some decorating when you move in!
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