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1000s of pensioners are at risk of losing their home

(16 Posts)
Itsgonnabeacoldone Wed 13-Dec-17 08:36:04

Now the mortgage interest benefit is to be made a loan. Aibu to think that's fair enough if you own a home and are having the tax payer pay for the interest it's fair to pay this back?

http://www.thisismoney.co.uk/money/mortgageshome/article-4962692/Thousands-low-income-pensioners-risk-losing-homes.html#comments-4962692

meredintofpandiculation Wed 13-Dec-17 08:50:01

If you have to repay mortgage interest, would it also not be fair for you to have to repay rent that the tax payer has paid for you?

If you own a house and then lose your job, you are also going to find it more difficult as you'll not be paying repayments, just the interest. So when you get back into work, you'll owe a lot more on the house than you expected. Having a charge on the house to repay interest benefit is just making things worse. Shouldn't the benefit system be designed in such a way as to help people get back on their feet as quickly as possible?

It may be counterproductive for older people. Everyone seems to want older people to downsize - if your home has a charge on it, then downsizing is not going to release equity. So why would you want to do it?

Itsgonnabeacoldone Wed 13-Dec-17 08:51:57

Did you read the link? Lots of people took on huge debt just before retiring and have had their mortgage interest paid for over a decade.

Difference with renting is you aren't getting the tax payer to help build up a asset.

Biker47 Wed 13-Dec-17 08:56:12

I'm struggling to have any sympathy for the person they've chosen to highlight in the report, took out a self-cert interest only mortgage in 2006, then retired at 60 years old, 3 years later, colour me shocked that they struggled to pay their mortgage payments after retiring. Probably trying to keep hold of as much of the inheritance at the taxpayers expense as they could.

Presumabley the government gets the first charge on any debt accrued before the mortgage company so can see why the mortgage companies might be getting a bit nervous and might resort to eviction.

Lostin3dspace Wed 13-Dec-17 08:58:29

Yeah I think that's a step too far really. I get that if you are a homeowner and lose your job, there's no reason why the state should keep up your mortgage repayments so that you can keep your assets.
But (assuming we aren't talking about huge homes here) to lose your home means having to rent. If you have no job, and assuming no equity to speak of to live off, then the state will pay or subsidise your rent, which is usually higher than a mortgage. It will ultimately cost the state more, surely, than if they paid your interest for a time.
As pointed out above, people receiving housing benefit don't have to pay that back. Presumably they've paid in in the first place!! A have homeowners...

Lostin3dspace Wed 13-Dec-17 09:01:09

Should've read the link obviously
Sorry

Itsgonnabeacoldone Wed 13-Dec-17 09:01:39

But these people aren't planning on ever working again and their home won't be taken off them, it will just have a charge on it when it's sold so the cost Vs renting doesn't ring true.

EtInTerraPax Wed 13-Dec-17 09:05:14

Outrageous that they were even given a mortgage in the first place. I'd like to think it wouldn't happen now.

VegasWithRadishes Wed 13-Dec-17 09:07:57

Interest only payments are about £50-£150 a month IME.
Find even a studio flat for that price in the uk and I'll be shocked....
a full repayment vs renting is also generally about 20% cheaper IME.
I don't disagree with the policy.
In any case there've been thousands of pounds worth of cuts including to HB i don't think cutting mortgage interest relief or whatever it's called is unfair particularly if someone chooses to retire early and rely on the state paying it (presuming no ill health at play).

PricillaQueenOfTheDesert Wed 13-Dec-17 09:12:15

I can’t get the link to open, but I can’t understand why pensioner would still owe anything. Surely their mortgage should finish at the same time as they retire?

meredintofpandiculation Wed 13-Dec-17 09:16:52

You can always find the odd case of people playing the system. It's not a good way of making policy. Giving publicity to these cases is, however, an excellent way of gaining public sympathy for cuts that you've already decided to make.

And as EtinTerraPax says, hopefully they wouldn't get a mortgage in the first place nowadays. Lending criteria have tightened up considerably.

meredintofpandiculation Wed 13-Dec-17 09:22:02

I can’t get the link to open, but I can’t understand why pensioner would still owe anything. Surely their mortgage should finish at the same time as they retire? The mortgage finishes at the time that they pay it off completely. Someone who is 20 years from retirement may take out a mortgae with a 20 year term, and their monthly repayments are calculated so as to pay off both the amount lent and the interest within that 20 years. But if they are made redundant, and have 6 months with no work while they find a new job, then only interest is paid for that 6 months. Unless they increase their monthly repayments, they will reach retirement with money still owing. In addition, if these new proposals take effect, when they sell the house, they'll have to pay back the 6 months of interest payments that they had as benefit.

christmaspudding1 Wed 13-Dec-17 10:05:56

hmm this one has been slipped in it seems

you have to wait for DWP to start paying interest as it is but they pay HB straight away,that always seemed unfair to me

this is going to affect familys as well and they are just going to incur debt through the charge

why are they going after the home owner,it will save peanuts compared to huge amounts of HB that get paid out

christmaspudding1 Wed 13-Dec-17 10:18:45

also have known people that have lost a job while having a mortgage

you have a waiting period of months before any payment so they get into arrears,then then the DWP payment is lower than the mortgage payment

place gets repossessed and occupants end up private renting

their mortgage reypayments were £500 a month the state now pays £850 -900 private rent

so it ends up much more expensive to house this family,madness and thats just for that there are also many more problems that occur through moving,kids schools,etc etc

mirime Wed 13-Dec-17 10:30:33

@Itsgonnabeacoldone

Difference with renting is you aren't getting the tax payer to help build up a asset.

Paying off interest doesn't reduce the amount you owe, if house prices increase you'd be building up an asset, if they drop you have less of an asset.

And many landlords rely on the taxpayer to help them build up assets.

christmaspudding1 Wed 13-Dec-17 15:33:34

agree many landlords are having DWP /HB paying their mortgages,nobody has a problem with that

and normally the rent is far far higher than somebody having the interest only paid

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