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Support for Mortgage Interest to be scrapped

(25 Posts)
Mybestusername Tue 06-Feb-18 07:03:49

Apparently the government is planning to cut support to homeowners on low incomes who are struggling with mortgage payments, replacing SMI with a loan arrangement.

Mybestusername Tue 06-Feb-18 07:04:09

Babyroobs Tue 06-Feb-18 17:46:04

They are not abolishing it altogether they are turning it into a loan form April. So if you want the dwp to keep paying mortgage support payments you have to sign the forms to turn it into a loan. You also have to sign a form to put a charge on your house. this loan + interest would be repayable when you sell the house. The loan would be paid from the equity in your home. the government have decided that it is unfair for home owners to profit from rising house prices ( obviously not in all areas of the country ) while thy pay the interest. hence turning it into a loan. It will hit a lot of people especially those long term ill / disabled who have no prospect of ever getting back into work. they will have to choose to try to pay their mortgage out of their benefits or take on the loan.

Babyroobs Tue 06-Feb-18 17:51:46

Sorry op- just saw that you did mention it turning into a loan.

TinaMena Tue 06-Feb-18 18:07:56

And what is wrong with that? Why should I as a taxpayer pay for your mortgage as well as my own?

Babyroobs Tue 06-Feb-18 18:35:47

I think there should be a time limit on the help available. It is to help people who lose their jobs/ fall ill and are unable to work etc so for many will be just short term and it would be a shame for people to lose their home for the sake of not being able to pay their mortgage for a few months. I can see how the scheme in it's current state could be completely abused though.
Maybe critical illness and redundancy insurance should be compulsory for anyone taking out a mortgage ?

Toffeelatteplease Tue 06-Feb-18 18:52:52

It's shit. And it's gone by relatively unnoticed

I'm on benefits because I care for disabled DS. I had no idea DS was disabled when I bought the house and there's no chance going back to work is sustainable for at least the next 10 years if ever and no insurance would ever cover your child being disabled.

£200 a month it will cost me. That's a lot. Most families could swallow that kind of drop in income with less than 3 months notice. Well we think it's 3 months notice,*noone can actually tell me*. That's right noone at income support, serco, or the specialist mortgage team can tell me. they don't know

Realistically, because in my case I actually bought a super cheap house It's sustainable whilst maintenance from comes will be a nightmare if it ever stops (usually every 18 months or so). I feel for anyone who found themselves suddenly in difficulties in a highly mortgaged house.

You're not paying for my house. I am. It's only the interest the benefit pays. I'm paying the balance. And the government will take that money away if I ever have to go onto the loan. It's basically a tax on the long termed disabled.

If I end up homeless it will cost the government a hell of a lot more than £200 pound a month. Not least because ive paid a lot of money to adapt the house to DS's needs

It's scandalous

Babyroobs Tue 06-Feb-18 19:02:18

It will switch to a loan in April . It has been in the press for some time now but I'm not sure how much notice people have been given. I know people are being sent the forms now to take out the loan. I would urge anyone to seek independent financial advice form CAB or similar before signing the forms so that you are fully informed as to what you are signing up for..

Mybestusername Tue 06-Feb-18 19:21:27

Toffee that’s exactly why I posted. Not because I’m expecting someone else to pay my mortgage hmm but because this is being quietly changed and as usual it is people on low incomes and / or with disabilities who will be affected.

needmorespace Fri 09-Feb-18 23:50:22

I think it's outrageous. It is the interest on the loan not the capital, families still have to find the capital to pay to keep their roof over their head.
No-one thinks it is unacceptable that Housing Benefit is paid to pay rent when someone has a low income or loses their job. Even though that HB is likely going to help some landlord pay off their mortgage on a second, third or fourth property.

Babyroobs Sat 10-Feb-18 08:41:57

I think it's that some people have sat on this benefit for years getting their mortgage interest paid whilst house prices have risen. The government has therefore enabled them to profit.

Toffeelatteplease Sat 10-Feb-18 11:07:07

some people has sat on this benefit for years

Yep. Because my DS won't suddenly become un-disabled. Unless you are saying disabled people shouldn't be housed.... or should only be housed for what 6months? a year? then it perfectly OK for them to be homeless hmm

The reality if, I have to take up the loan and my DS remains disabled, is that the government will eventually own potentially a significant proportion of home. Despite the fact I will have paid for it. If the government started taking people's homes from them there would be uproar. But it's okay because it's only people on benefits. We should be grateful for what we get.

A measure of society is how it treats its weakest members.

Babyroobs Sat 10-Feb-18 11:15:48

Toffee- This is not my opinion, just the way the government see it and why they have changed the rules. I see a lot of people in my job who are now having to decide whether to switch over to this loan and most of them are long term ill and disabled. Some will manage to pay the mortgage payments out of their PIp/ DLA money but obviously depends on their monthly payments. It's a worry for many .

Babyroobs Sat 10-Feb-18 11:18:59

It's a worry for people who have no prospect of being able to work in the foreseeable future. Most of the people I have seen in this situation are now trying to find the mortgage payments form their benefits rather than take on the loan but then most of them are people in their fities and early sixties who are towards the end of their mortgage term so probably only have a few thousand left to pay off.

Toffeelatteplease Sat 10-Feb-18 11:19:52

This is not my opinion

Phew!! Cos it's an absolute shitter. We will be OK. But I know there's a good many people who won't

YellowMakesMeSmile Sat 10-Feb-18 14:39:00

I don't see anything wrong with it being a loan. It's paying towards an asset, doesn't matter if it's the capital or interest it all forms part of the mortgage and leaves the person with a large asset at the end.

I think it should be the same for HB to even the playing field.

It's certainly an incentive to ensure those that can work actually do.

Bombardier25966 Sat 10-Feb-18 14:50:24

I think it should be the same for HB to even the playing field.

But it's not is it? Landlords continue to profit from extortionate rents with zero controls yet those who are disabled are punished.

It's certainly an incentive to ensure those that can work actually do.

And for those that can't? The same people that have already been hit by reduced ESA, increased council tax and near non existent social care.

When did it become so acceptable to repeatedly punish those least fortunate?

Bombardier25966 Sat 10-Feb-18 14:58:58

Maybe critical illness and redundancy insurance should be compulsory for anyone taking out a mortgage

That would not help anyone incapacitated with a pre existing condition.

It has been in the press for some time now

The mainstream media have not covered it more than a handful of times.

I would urge anyone to seek independent financial advice form CAB

You need to be regulated to advise on financial products. CAB have stated they cannot advise beyond benefit entitlement and money management, they cannot tell people whether to take the loan or not.

most of them are people in their fities and early sixties who are towards the end of their mortgage term so probably only have a few thousand left to pay off.

Quite an assumption there, you are aware that many have far higher mortgages in later years, especially if they've only been able to cover the interest due to long term disability?

Another example of the "I'm alright Jack" attitude.

alotalotalot Sat 10-Feb-18 15:04:31

I suppose it can be viewed a bit like shared ownership. The government help to pay for it so they get a share of the property. Ok in theory but shitty in reality.

Coffeethrowtrampbitch Sat 10-Feb-18 15:06:02

It's a ridiculous decision led by ideology. It will cost far, far more to rehouse families who can't pay their mortgage in social housing after their homes are repossessed, and they will have to be housed anyway, especially if they are disabled or vulnerable. Adaptations to new properties could cost thousands.

Dh's mum had MS and the SMI payment allowed her to support him by taking in lodgers when his dad left at 9. Her benefits were reduced accordingly and when she had to go into a care home her home was sold to pay for it.
With no SMI she couldn't generate any income or have a house adapted for her needs. All the burden of providing her housing and care would have fallen in the local authority, and that will be what happens to people now. And the LA's don't have spare cash to afford it.
It will actually cost money, but as long as it meets the ideological requirement of disadvantaging the poor and disabled it becomes policy. Nuts.

Babyroobs Sat 10-Feb-18 16:03:07

Bombardier - I think you have misunderstood me - I was mearly stating that the majority of people I see in my line of work who are being affected by this are in their 50's and 60's with small mortgages. of course there are others with bigger ones. How is that an ' I'm alright jack attitude' ??
As I stated previously I don't agree with this , I was just trying to explain why it has come about. I see people every day with the dilemma of whether to take up this loan. We have been told not to advise on it either. Maybe CAB won't advise but people need to seek financial advice on it somewhere rather than just sign the forms they are sent out by the DWP which includes a form for a charge on your home.

LadyLapsang Sat 10-Feb-18 23:26:18

This was covered on Radio 4's Money Box today; you can catch up online. Interestingly they are covering equity release in the next programme.

Antiopa12 Mon 12-Feb-18 08:20:57

Shame on the people who developed this policy!
A person who has served this country in conflict zones returns injured and is unable to work, their spouse has to become a full time carer (claiming the pitiful amount that is the current Carers Allowance ) and now their home has a charge put on it ???

A mother who is a lone parent caring 24/7 for a severely disabled child keeping them out of a residential placement/ hospital bed and saving the state hundreds of thousands of pounds over the child's lifetime, claims Carers Allowance . She has a future looking forward to just existing but on the state pension ( no employers pension enrolment for her! ) and additionally now is kicked down further and will face housing uncertainty

Sometimes those clever policy wonks need to focus more on just money and realise that those vulnerable people on benefits are not "takers" but people who give a lifetime of valuable service.

Antiopa12 Mon 12-Feb-18 13:22:58

God forbid that we ever get to the situation in this country where the mother of a disabled child has to leave the child home alone whilst she goes out to work to keep them in their own home and a roof over their heads. We still have a welfare state, we are a rich country and people here are decent people except it seems there is a small minority of policy makers who subscribe to the ideology that you must work at all costs and not expect the state to step in. Their heads need a big wobble. This reminds me of the dementia tax debacle and there undoubtedly will be unforeseen consequences down the road.

nad79 Sat 03-Mar-18 22:09:03

I was claiming 2 lots of SMI, one for mortgage and one for a loan as my home was a first time buyers scheme with 50% mortgage and 50% loan. I had to stop work because I am a single parent and carer of my son with ASD. This change has meant that we are selling my home, and having to be rehoused by the council. It is either that or get a loan for £400 a month! Me and my son do not want to leave our home but it's either that or get into debt.
I have written to my MP, but there is nothing anyone can do. This change has been devastating for us. Plus I only found out about it 6 weeks ago.

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