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Stamp duty removed when switching mortgage lender

The 2012 Budget offers a significant tax break for homeowners who want to refinance their loans to get a better rate.

Hoping to promote competition among the banks, Government said it removed the stamp duty rate of 0.1 percent for borrowers switching mortgages from one bank to another institution.

HSBC Bermuda and Capital G Bank told

The Royal Gazette they supported the change.

In announcing it, Premier Paula Cox said: “Assignments or transfers of mortgages are currently charged at a rate of 1/10 percent of the sum secured under ... the Stamp Duties Act 1976. Government proposes to remove this stamp duty charge to encourage mortgage payers to seek the best financing options available to them and to promote competitive lending rates between our local banking institutions.

“This exemption from the stamp duty charge will reduce the cost to customers when transferring a mortgage from one bank to another.”

HSBC Bermuda currently offers a rate of 6.5 percent on 30-year mortgages.

According to its website, Butterfield Bank currently offers a rate of 6.75 percent on a 30-year mortgage.

Capital G offers a rate of 6.25 percent on 15-year mortgages and 6.5 percent on terms above 15 years.

An HSBC spokesperson stated: “The removal of stamp duty, payable on assignments or transfer of mortgages, for borrowers in Bermuda is welcomed. HSBC supports efforts to ensure a prudent yet robust competitive mortgage environment. Stamp duty removal for assignments or transfers of mortgages will assist in this regard.”

The spokesperson added: “We would look forward to working with customers who are interested in reviewing their home ownership alternatives using HSBC’s suite of industry leading credit solutions.”

Ian Truran, president and CEO of Capital G said: “Capital G supports the decision by the Government of Bermuda as outlined today in the 2012/13 Budget Statement to remove stamp duty charges for the assignment or transfer of mortgages.

“Capital G has always encouraged healthy competition and supports Government’s concession that will remove costs that previously inhibited a borrower’s ability to obtain the most competitive terms available to them.”

Butterfield Bank declined to comment on the change.

Borrowers' boost: Stamp duty will no longer be levied when borrowers switch from one mortgage lender to another

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Published February 25, 2012 at 7:55 am (Updated February 25, 2012 at 7:55 am)

Stamp duty removed when switching mortgage lender

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