More than a quarter of homeowners are being forced to take out larger mortgages to enable them to pay their stamp duty, online mortgage provider mform.co.uk has revealed.
Among the affected group, the average homebuyer is taking out £3,770 more to cover stamp duty, increasing monthly bills for the average £150,000 mortgage at a six per cent rate by £24.58.
Critics say that the stamp duty on homes costing over £125,000 unfairly penalises homebuyers in expensive housing areas such as London and the south-east.
"With the average house now costing upwards of £170,000 it is difficult for people to escape," commented mform chief executive Eamonn Rice, who emphasised that the stamp duty payable "rises steeply" in line with house value.
The one per cent duty on home above £125,000 rises to three per cent for homes worth £250,000.
Homebuyers choosing a larger mortgage to cover the stamp duty could later be caught out by having to pay stamp duty for a greater number of years, Mr Rice warned.
Housing market analysts Rightmove and lender Halifax are continuing to campaign for the stamp duty threshold to be raised.To learn more about remortgaging, click here.
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