Stamp duty is one of the biggest concerns for aspiring homeowners, particularly as many of them need all their spare cash to go towards putting down a deposit.
In January 2013 alone, some 40,000 people spent a massive £70 million on stamp duty charges.
And TSB research shows that the average homebuyer spends more than £1,650 on stamp duty, while one in 10 would-be first-time buyers worry about being able to cover such costs.
The new bank has therefore decided to make a splash in the mortgage market by replicating a stamp duty “holiday” introduced on homes worth up to £250,000 by the Labour government in 2009 but has since retracted.
Ian Ramsden, mortgages director at TSB says: “Stamp duty is clearly a significant up-front cost for first-time buyers and movers alike. This offer will enable homebuyers across Britain to spend more on what matters most to them when moving house.”
People in the 1% stamp duty bracket are not the only ones TSB is keen to attract, however. It is offering both customers paying no stamp duty because their homes cost less than £125,000, and those spending more than £250,000, £500 cashback to help with moving costs such as surveys and removal fees.
Many of its deals are also fee-free, cutting the upfront costs faced by cash-strapped borrowers.
This is true, for example, of all its first-time buyer deals (a two-year fixed rate priced at 2.94%, a five-year fix at 4.54% and a two-year tracker with a current rate of 2.84%) and versions of its two and five-years fixes and two-year tracker for homemovers, who pay a higher rate to avoid a £995 fee.
The fixed rate deals are open to anyone with between a 10% and a 25% deposit (apart from the fee-free fixes for movers, which are only available if you can put down at least 15%).
The trackers, meanwhile, are available for buyers with deposits of between 15% and 25%.
When compared with other fees-free mortgages on the market, this makes them a competitive option – especially for those who can take advantage of the stamp duty offer.
While both First Direct and the Post Office offer borrowers with a 25% deposit fee-free, two-year fixes at 2.59%, neither deal is available to those with a smaller deposit, nor comes with stamp duty paid.
This is not the first time a UK bank has offered to pay stamp duty on lower value properties, though. Last year, Lloyds Banking Group-owned Halifax offered to cover the cost of the tax for first-time buyers – but not movers – spending up to £250,000.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.