Benefit and mortgage assistance question.

[Deleted User]

There were 2 pieces of good news today in the pre-budget report,he confirmed that as from 1st jan the waiting time for help would be reduced to 13 weeks and that the max amount would increase from 100k to not 175k but 200k
He also announced that the dwp`s interest rate would be frozen at 6.08% for 6 months,it was due to reduce next month to 5.08% which is base rate plus 1.58%

Rikki

Quick question.........

Does anyone know if the rate is going to alter in April?
How will they work out the new rate with the banks svr's all being different?
Will the rates be tailored to suit the individual banks?

TOBRUK

Yes. I phoned them in February and was informed that the rate would alter in April but they didn't have the rates then and I would have to phone them this month to find out. Now the BOE rate has gone down again I'm sure there will be a fall in amount they pay again! Every time the BOE rate has fallen I have had to pay out more each month on my mortgage beause of shortfall.

Rikki

My friend banks SVR rate is still over 5%. :eek:

[Deleted User]

Rikki wrote: »

My friend banks SVR rate is still over 5%. :eek:

so is mine,with a small local bld/soc,im just hoping that instead fo reducing the ismi rate in April,they will announce a new formula in the budget,if they dont my contribution to my mortgage could increase from £100 a month to £180,wiping out in one stroke the increase in benefits due next month

Fat_Debtor

I don't understand this. Surely the amount of mortgage you pay to the lender will remain unchanged whatever the interest rate is? You just pay the capital element, which remains unchanged, don't you?

Rikki

Fat_Debtor wrote: »

I don't understand this. Surely the amount of mortgage you pay to the lender will remain unchanged whatever the interest rate is? You just pay the capital element, which remains unchanged, don't you?

No. My friends mortgage is interest only and her rate is presently over 5% the banks svr rate.

The DHSS pay their rate is Base Rate + 1.38% so their is a shortfall in the monthly interest payment. If the DHSS lower their rate to Base Rate of 0.5% + 1.38% her mortgage interest payment would be short by the 3.12% each month.

[Deleted User]

Fat_Debtor wrote: »

I don't understand this. Surely the amount of mortgage you pay to the lender will remain unchanged whatever the interest rate is? You just pay the capital element, which remains unchanged, don't you?

If you are getting ISMI then the rate of interest on the interest part is paid at a rate set by the dwp,this is usually bank of england base rate + 1.58%,so currently it should be about to drop to 2.08%,however in november they announced that for 6 months the rate would remain unchanged at the then rate of 6.08%,at all times the capital part of the repayments remain your responsibilty(or the endowment if you have one),what happens at the end of those 6 months(may 2010)is anyones guess,i expect an announcement will be made in the April budget

mummytofour

woodbine wrote: »

If you are getting ISMI then the rate of interest on the interest part is paid at a rate set by the dwp,this is usually bank of england base rate + 1.58%,so currently it should be about to drop to 2.08%,however in november they announced that for 6 months the rate would remain unchanged at the then rate of 6.08%,at all times the capital part of the repayments remain your responsibilty(or the endowment if you have one),what happens at the end of those 6 months(may 2010)is anyones guess,i expect an announcement will be made in the April budget

Do you mena may 2009? I only ask as May 2010 would be nice:-)

ellejelly

the dhss are paying the interest on my mortgage,if i downsize will they still pay it