Can you add stamp duty to a mortgage?

If you’re buying a home, stamp duty (or the devolved equivalents) can be one of the biggest upfront costs, often due at the same time as solicitor fees, surveys and moving expenses. It’s natural to ask whether you can “roll” stamp duty into your mortgage.

In practice, there isn’t usually a dedicated product that automatically adds stamp duty as a separate line item. However, you may be able to fund stamp duty by borrowing more and reducing the deposit you put down, as long as the lender is satisfied with your affordability and loan-to-value (LTV).

Related guides:

• How to reduce Stamp Duty Land Tax
• Stamp duty rules for first-time buyers
• Stamp duty on a second home

How it works (the practical “workaround”)

A common approach is:

• Reduce your cash deposit by the amount you need for stamp duty.
• Borrow that extra amount instead.
• Keep your LTV within the lender’s acceptable range.

Because mortgage lenders assess the risk of lending based on LTV and your ability to afford the repayments, the key question isn’t “can stamp duty be added?”, it’s whether increasing your borrowing is still affordable and acceptable to the lender.

A simple example

Imagine you’re buying a £450,000 property.

• If you put down £100,000, your LTV is 78% (so you’d borrow £350,000).
• If you instead reduce your deposit to £87,500, you’d borrow £362,500.
• The difference (£12,500) could be used towards stamp duty and related purchase costs.

Your LTV may still fall within a range many residential lenders consider, but your monthly repayments will be higher because you’re borrowing more.

What lenders will consider

When you ask to fund stamp duty via increased borrowing, lenders will typically focus on:

• Affordability: can you comfortably meet the higher repayments?
• LTV: does the reduced deposit still meet the lender’s criteria? See loan-to-value explained.
• Overall borrowing: how the extra amount affects your debt and income profile.
• Your deposit source and remaining cash: you’ll need enough funds for the full purchase process, not just stamp duty.

Even if a lender is willing to consider the higher borrowing, it doesn’t automatically mean it’s the best option for you, especially if it stretches your budget.

Does it work the same in Scotland and Wales?

Stamp duty rules differ across the UK:

• England & Northern Ireland: Stamp Duty Land Tax (SDLT)
• Scotland: Land and Buildings Transaction Tax (LBTT)
• Wales: Land Transaction Tax (LTT)

But the principle is similar: you may be able to use “sacrificed” deposit money to cover the tax, provided you still meet the lender’s LTV and affordability requirements.

Different buying situations

Can first-time buyers add stamp duty to a mortgage?

Potentially, yes, by borrowing more and reducing the deposit.

However, first-time buyers often have less flexibility with deposits, because they may not have property equity to fall back on. The other factor is that first-time buyer relief can reduce the amount of tax payable, which may change whether you need to fund much (or any) of it through extra borrowing.

If you’re a first-time buyer, it’s worth modelling the numbers carefully so you don’t borrow more than you need.

Can you add stamp duty to a second home mortgage?

The tax position (and whether higher rates apply) depends on your circumstances, but the mortgage side still comes down to affordability and LTV.

Is it a good idea?

Adding stamp duty to a mortgage by borrowing more can be convenient, but it’s usually an expensive way to fund the tax because you repay it over the mortgage term along with interest.

A common rule of thumb is:

• If you have other ways to raise the money (within reason), they may be cheaper.
• If you genuinely have no alternative, it can be a practical route. Just make sure the monthly repayments remain manageable.

What if you can’t afford to add it?

If increasing borrowing would push repayments too high, you may need a different approach, such as:

• adjusting your purchase price or negotiating where possible
• reviewing the deposit you can realistically keep available for the full transaction
• exploring mortgage options that better match your affordability (our brokers can help compare what’s available)

Also, be aware that regulations introduced in 2018 mean you can’t use a credit card to pay stamp duty.

Can you use equity to pay stamp duty?

If you’re selling a home and buying another, you may have equity available. In many cases, equity can be used flexibly, so if you want to cover stamp duty from your sale proceeds, you may be able to borrow a different amount on your new mortgage.

Our brokers can help you think through how deposit, equity, and borrowing interact so you don’t end up with a shortfall at completion.

Next step: get the numbers right

If you’d like help working out the most sensible option for your situation, speak to a mortgage broker who can review your income, outgoings, deposit and purchase details and then discuss the realistic mortgage routes available to you.