One of Britain’s biggest mortgage companies has come up with a new way to try to boost buying across the housing market - paying stamp duty for a purchaser, but only if they accept a higher interest rate.
Barclays is launching a fixed rate mortgage aimed at first time buyers and existing owners to recover some or all of the stamp duty on their next home via a cashback scheme.
The full stamp duty cost will be covered on properties with a value of up to £250,000. Properties with a value of more than £250,000 will get £2,500 as a contribution to stamp duty costs up to £500,000.
Specifically, Barclays’ Homebuyer Cashback mortgage will give up to £2,500 cashback on mortgages greater than £150,000, up to £500,000.
Cashback of £1,250 is available on mortgages between £100,000 – £150,000 to match the maximum stamp duty on homes costing up to £187,000.
The loan is available as a five-year fixed rate at 2.69 per cent, based on 80 per cent Loan To Value for the minimum £150,000 loan option with £2,500 cashback.
The same terms apply for the £100,000 to £150,000 loan option with £1,250 cashback.
“This fee-free cashback purchase only mortgage completely removes one of the major barriers faced by many first time buyers and home movers, as well as there being no product or valuation fees to pay” says Craig Calder, director of Barclays Mortgages.
“With a cashback of up to £2,500 it will help first time buyers move forward and buy their own home much sooner with the flexibility to spend the cashback to either recover their Stamp Duty cost or however they wish” he adds.
At the other end of the housing market, Barclays is also increasing its maximum loan from £5m to £10m.