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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To expect people to pay their own mortgages..?

51 replies

RaspberryCheese · 05/02/2018 10:33

www.theguardian.com/money/2018/feb/05/state-benefit-support-mortgage-interest-loan

Why the outcry? We have a system whereby people can own a hime and if they fall on hard times, they can switch to an interest free mortgage and the state i.e the rest of us, pays the interest presumably ad infinitum.

Why should the state do that?

No..as the article suggests, it should switch to a loan based system whereby payments the state makes acquire equity in the property which can be recouped at a later date.

OP posts:

ohreallyohreallyoh · 05/02/2018 12:04

How do you expect someone who has lost their job to pay their mortgage? Or someone who’s partner has walked out and left a woman with a disabled child to care for? How does someone who’s relationship has broken down manage a mortgage that was given on the basis of 2 full time wages?

For most people, the situation is short term - a new job is found, property is sold post-divorce etc - so we avoid them losing their homes and adding to an already huge issue with lack of social housing and the likelihood that in most cases, mortgage interest will be less than housing benefit.

But sure, kick,people when they’re down, take their houses from them and make sure that someone who would have been back up and running within a year is now entirely broken, homeless, and as such, far less likely to become a productive, tax paying member of society again.

Bluelady · 05/02/2018 12:09

Scandalised by this. I really can't see the difference between paying housing benefit for a rented property and mortgage interest for one that's owned, except the former probably costs more. Bloody government and its austerity.

TalkinPeace · 05/02/2018 12:16

In the USA the super rich get to offset their mortgage interest against tax
the most regressive tax break of all

FluffyWuffy100 · 05/02/2018 12:37

Paying for HB and paying for mortgage interest is simply not the same

Basically they are. They are both going towards paying off a mortgage on a privet asset. Or for non-mortgage rentals just going straight into a private pocket.

Youshallnotpass · 05/02/2018 12:48

Paying for HB and paying for mortgage interest is simply not the same

As I said above, paying HB is actually arguably worse. It isn't just interest on the privately owned mortgage that is being paid - profit and capital too.

Youshallnotpass · 05/02/2018 12:49

Sorry, not "worse" (I agree with the provision of HB and the mortgage interest benefit) I simply meant in the context of the argument.

needmysleep75 · 05/02/2018 12:52

My sister claimed this when her husband died and it was a lifeline for her but I do think the OP is getting a lot of unfair criticism. I think what she is trying to say is why shouldn't it be paid back at the time the house is sold. I don't think they should be charging interest on it, but I can't see why it can not be paid back out of the equity ( if there is any ) at the point of selling.

feral · 05/02/2018 12:58

YABU. Utterly unfair system to begin with.

If you get made redundant and you're a tenant you get immediate help but if you have a mortgage you have to wait months anyway.

Why help one and not the other?

This is why the government push home ownership so they won't have to help you when you fail to hard times!

Mrsdraper1 · 05/02/2018 13:02

Don'tCall
I don't think anyone is saying it's wrong to pay HB, what they're saying is why is paying someone's mortgage interest short term to help them stay in a property when they fall on hard times worse than paying HB which is usually much more than mortgage interest and the cost of rehousing the family who had their home repossessed is much higher.

ArcheryAnnie · 05/02/2018 13:13

If you were arguing that no private houseowner was allowed to profit from benefit subsidies, then you at least would get points for consistency.

But if you are OK with private landlords paying off their mortgages with housing benefit got from their tenants, but not OK with the (generally much smaller) interest payments, then YABU.

sashh · 05/02/2018 13:20

What Shimmershimmerandshine said.

Better to continue with the payment as is but on death the house goes to the local council, or is sold and money used to repay the funding.

coconuttella · 05/02/2018 13:43

But conversely it's fine to pay rent from taxpayers money via uc/ hb to pay the mortgages of landlords. So it's fine if your rich to be subsidised but not to support stability for the poor.

I can see the point here, but if you follow that logic you could argue that any business that sells goods or services to those in receipt of benefit is being subsidised by the taxpayer. When I used to save up my child benefit to buy stuff in Mothercare, were their profits therefore state subsidised?

specialsubject · 05/02/2018 13:58

The corollary of the guardian swallower logic that housing benefit should not ' line the pockets of private landlords' is that no private landlord should rent to an HB tenant.

So where do you suggest such people live, given the enormous shortage of social housing?

SilverDragonfly1 · 05/02/2018 14:20

No one thinks that. The point is that it's inconsistent to behave as though there is any difference, aside from public cost, between HB and SMI.

Bigfatchips · 05/02/2018 14:29

If I lost my job, it would cost the tax payer less than £500 per month to pay my mortgage interest.

It would cost around £2000 - £2500 pcm to fund a private let.

There aren't any council or HA properties around here and I haven't been on a list anyway.

Firesuit · 05/02/2018 14:43

Someone who receives mortgage interest for a short period is costing less than someone who receives housing benefit.

A home-owner who suddenly needs state support is in a worse position than a renter, the support (if any) will only last a short time before they're forced to sell their house.

I suppose the logic is that if you are rich enough to be a home-owner you shouldn't really be getting benefits, and should sell your house before you're allowed to claim.

The argument that housing benefit subsidises landlords is nonsense. It subsidises the housing benefit recipient. The landlord gets exactly the same rent regardless of whether or not their tenant gets housing benefit. Imagine a tenant stays for several years, and only receives housing benefit for a subset of that time, when they were out of work. The landlord didn't make any more profit in that time than in the period when there was no housing benefit. The landlord only ever made the normal economic profit on his asset.

specialsubject · 05/02/2018 14:51

Yes, but try getting the bile spewers who think all landlords are evil to get that.

DontMakeMeShushYou · 05/02/2018 14:54

Those in favour of the scheme have argued that it is not the role of the UK taxpayer to subsidise mortgage payments for an asset that can be passed on to children after their death.

The irony being that for very many people this asset will actually be used to pay for their care when they are older. Care that will otherwise have to be paid for by the state.

It's petty jealousy. It cannot be seen as anything else. Why else would you deny someone a few hundred pounds of help a month of taxpayers money, preferring instead to commit to paying many hundreds of pounds a month of taxpayers money in HB and further down the line, many many thousands of pounds in social care costs?

Besides which, it is only interest that would be paid. Interest that is to a degree influenced by government policy and may well be being paid to state-owned banks.

ohreallyohreallyoh · 05/02/2018 14:58

I suppose the logic is that if you are rich enough to be a home-owner you shouldn't really be getting benefits, and should sell your house before you're allowed to claim

the reality of that is workhouses, though, surely? Even people with reasonable incomes can be living from paycheck to paycheck. It only needs a couple of major issues to occur and you suddenly can't make all your payments. It then becomes a battle to keep up. Selling can take time - if we are saying you can't claim benefits until you have nothing at all, then surely we are saying if you want to claim benefits, you have to hand over everything and let us take over your life?

We really are only a step away from those days, I think. And edging ever closer.

Springiscoming123 · 05/02/2018 15:45

havent read all but op you would of loved me,i was under the intrest only paid by the DWP and got the sum of £100 a month but if i had been renting the same house HB would of paid £900 a month,were is the sense in that do the maths

i was fortunate that i did not have a big mortgage but still had to pay the endowment on it which was over £100 a month at of normal IS

in the end my ex partner died and the mortgage was paid of but i still think for the for what it saves they should leave it and people should stop saying the DWP is paying for their home

people dont seem to mind BTL landlords sucking up big payments

IWannaSeeHowItEnds · 05/02/2018 16:41

Even if people did benefit by getting some state contribution to their asset, is that so terrible? They have presumably been taxpayers on the past, to get a mortgage in the first place. I wouldn't resent them getting a bit back.
Why the need to reduce everything to the lowest denominator?
Much better to give them a leg up and save what it would cost to give hb.

Plus, if there was sufficient social housing for everyone who wanted/needed it, or low cost rents then we could say house ownership is a luxury choice, but there isn't. Home ownership is not a freely made choice for most people.

Shimmershimmerandshine · 05/02/2018 18:24

Even if people did benefit by getting some state contribution to their asset, is that so terrible?

People work in the public sector
People claim child benefit
People claim SMP/SSP/ PIP

So taxpayers (sorry that puts my teeth on edge) pay towards lots of mortgages. The extent to which people want others to have shit lives is frankly pretty staggering.

niccyb · 05/02/2018 18:39

Probably another way for the government to get their hands on a persons house.
They want us to work until we are ready to die and so many elderly have to give up their home to pay for social care when they can no longer look after themselves.
Some people have to have interest only mortgage as a break whilst they are unwell or if they want a break from work when they have a baby.
This is another way in which the government want money/equity.

anothersuitcase · 05/02/2018 19:07

Wow a lot of people don't like landlords! They are offering a service and people are paying for it. It's irrelevant how those people get the money to pay! There isn't this kind of vitriol about childminders getting paid from tax credits?! It's irrelevant to the childminder where the customer gets their money.

Shimmershimmerandshine · 05/02/2018 19:53

Poor landlords

That isn't what anyone is saying at all, merely that paying someone's mortgage is cheaper and preferable.

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