31 May 2022

How is stamp duty calculated on a mortgage?

Principal Reduction

A stamp duty calculator is coded with an equation that takes the overall property value and the property value percentage stamp duty percentage to calculate the exact amount. Calculators, though, are unable to input specific grants and special notices, meaning that the calculation is an estimation.

So, how exactly is stamp duty calculated on a mortgage? First, the calculator will look at the overall property value. Truthfully, stamp duty does not have anything to do with monthly mortgage payments but the property value. Then, the state or region chooses a percentage or property value as a government fee. Typically, an average stamp duty percentage is 3-4% of the property’s overall value. 

Although this is true, some calculators will also ask for additional information such as the type of property (residential vs investment) and if you are a first time home buyer. A Mortgage House expert can also do a stamp duty calculation with the right information. Exemptions will not show up on online calculators.

Stamp Duty Calculation Conclusion

All in all, stamp duty fees are calculated based on the overall property value of a home. Since this is the case, it is important to consider that the number fluctuates with each year as property values rise and fall. There is an equation programmed into Stamp Duty calculators that will do the work for you, but exemptions and grants are not applied as they frequently change. Mortgage House lenders can help you find the stamp duty rate for your state with ease.

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