Based on November’s average purchase price of £227,619, a buyer would pay £2,276 in stamp duty under the old system and will now pay £2,052: a saving of £224.
However, the price drop from October to November will save the typical borrower £463 in repayments over the initial term of a three year fixed rate. For five year fixed rates, the saving adds up to £632 while for two year trackers the saving is £249.
Only borrowers opting for a two year fixed rate would benefit more from stamp duty changes than from falling rates.
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“The recent changes to stamp duty are undoubtedly a coup for the majority of would-be owners, making significant reductions to the cost of buying a home. However, perhaps without realising, many have already been experiencing bigger savings in the form of falling mortgage rates.
“This emphasises the benefit of securing a competitive rate, as doing so can save hundreds of pounds in the long run. An independent mortgage broker is best positioned to review all of the options in the market, and can help guide consumers towards the most affordable and realistic product for them.”
