Support for mortgage interest (SMI) extended AGAIN

Graham_Devon

julieq wrote: »

Had time now to look in detail, and the first point is that the additional cost appears to be the cost of keeping a short (13 week) waiting period rather than 39 weeks, so the cost of SMI will be higher than £110M - which it should be.

In November 2009 SMI was supporting 225,000 people.

The lowest monthly payment was £24. The highest monthly payment was £684.

So lets take £300 as the average....fair?

Thats £67,600,000 per month.

£810,000,000 per year.

This is based on Novemeber 2009 claimants. Claimants are likely to have increased, however, I have no figures for this so far.

chucky

Graham_Devon wrote: »

In November 2009 SMI was supporting 225,000 people.

The lowest monthly payment was £24. The highest monthly payment was £684.

So lets take £300 as the average....fair?

Thats £67,600,000 per month.

£810,000,000 per year.

This is based on Novemeber 2009 claimants. Claimants are likely to have increased, however, I have no figures for this so far.

can someone explain to him that averages don't work like that...

come on Devon stop pretending - you can't be this dim!!!

Graham_Devon

Heres a bit about excess payments:

Recent amending regulations1 clarify how qualifying lenders should apply excess mortgage interest payments to these accounts. The regulations make no changes to the amounts payable under the Support for Mortgage Interest rules. However the regulations provide that any payments in excess, resulting from the actual rate being lower than the standard rate, must first be applied to any arrears of mortgage and then towards the discharge of any liability to repay any other sum in respect of that loan or the principal sum of that mortgage. The regulations also make provision for applying the excess in cases where there are two or more eligible loans from the same qualifying lender. This approach is in line with the principles underpinning the introduction of the Standard Interest Rate announced in 1995.

This bit amused me:

Some customers have also been requesting refunds. It has therefore been necessary to confirm in legislation that excess mortgage interest payments must be used to reduce customers’ mortgage liabilities and not for any other purpose.

And...

The estimated distribution of the mortgage rates paid by Support for Mortgage Interest customers is given in Table 3. At the current Standard Interest Rate of 6.08%, we estimate that 92% of Support for Mortgage Interest customers (180,000 people excluding non- Mortgage Interest Direct customers) will receive awards in excess of their eligible mortgage interest outgoings. However, even customers in this position do not necessarily receive Support for Mortgage Interest payments in excess of their full housing costs where part of their mortgage is ineligible (taken out for some purpose other than purchasing the property or making certain home improvements).

As for his chuckyness..

chucky wrote: »

i can't believe the Orpheo and that dim Devon bloke think that SMI pays off the capital on peoples mortgages for them...

Indeed. Stop typing.

StevieJ

Graham_Devon wrote: »

In November 2009 SMI was supporting 225,000 people.

The lowest monthly payment was £24. The highest monthly payment was £684.

So lets take £300 as the average....fair?

Thats £67,600,000 per month.

£810,000,000 per year.

This is based on Novemeber 2009 claimants. Claimants are likely to have increased, however, I have no figures for this so far.

So that is 0.8 billion compared to what was it 21 billion for renters? still looks to low.

Graham_Devon

chucky wrote: »

can someone explain to him that averages don't work like that...

come on Devon stop pretending - you can't be this dim!!!

I know it doesn't work like that. I'm just using what I have access to and taking a figure which I believe to be a fair representation.

Please stop this chucky. I'm giving the figures julie asked me for. I'm giving the facts Julie asked me for.

I can't find the actual average payment, and neither can Julie. However, all things considered, £300 would be a fair guesstimate.

chucky

Graham_Devon wrote: »

This bit amused me:

i can't believe that the Devonian Institute of Economic Theory has developed another method of calculating an average.

Take the highest figure then take the lowest figure, disregard everything else even though you have 225,000 other pieces of data and that's the average.

we have mean, median, mode and now the moronic average. well done Devon :T

StevieJ

chucky wrote: »

can someone explain to him that averages don't work like that...

come on Devon stop pretending - you can't be this dim!!!

Doesn't really matter even if everyone was receiving the full relief it would still be well under 2 billion according to his figures.

julieq

God, they don't make this easy. I've been poring over reports and committee minutes and all sorts of stuff, and the best I can come up with is HPC reporting a figure of £570M from a newspaper report. That sounds credible given the spread of recipients which will be biased low, however bear in mind that was generated at the 6.08 rate and the coalition cut that in half.

There's a lot of data in:

http://www.dwp.gov.uk/docs/support-for-mortgage-interest.pdf

Including the spread of interest rates from a large sample of recipients.

Graham_Devon

StevieJ wrote: »

Doesn't really matter even if everyone was receiving the full relief it would still be well under 2 billion according to his figures.

It's all guestimates. That was the figure for November 2009.

I'm not sure we can just keep saying "it's only £110m"...."It's only 0.8bn"..."it's only 2bn".

If its "only" £2bn. That means we, as taxpayers, are paying £1bn towards the capital on peoples mortgages. I.e. paying down their mortgages.

To put that into perspective, the 1p reduction in fuel duty cost the government £2bn.

So, in effect, you could suggest 25p of every single 50 litre tank of fuel, is going towards paying off peoples mortgages.

The average family uses 3 tanks a month. So the average family is paying £9 a year to pay off other peoples mortgages. £18 a year if you factor in interest payments.

However, there are likely to be more claimants now. So higher costs.

I'm leaving this thread now until a decent post comes along anyway, one which actually debates the subject. You two nitpicking at everything is just silly now.

Graham_Devon

julieq wrote: »

God, they don't make this easy. I've been poring over reports and committee minutes and all sorts of stuff, and the best I can come up with is HPC reporting a figure of £570M from a newspaper report. That sounds credible given the spread of recipients which will be biased low, however bear in mind that was generated at the 6.08 rate and the coalition cut that in half.

There's a lot of data in:

http://www.dwp.gov.uk/docs/support-for-mortgage-interest.pdf

Including the spread of interest rates from a large sample of recipients.

An even bigger document here...

http://www.dwp.gov.uk/docs/support-for-mortgage-interest-excess-payments.pdf

And no, it's not easy!

Bear in mind this si all old data though.