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Support for mortgage interest (SMI) extended AGAIN
Comments
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so one person does it and everyone who is claiming SMI is doing it... yes ok then...Graham_Devon wrote: »It's paid for any remortgages whereby the remortgage was taken for improvements to the house.
Thing is, theres no way of asking to show that every last penny was spent on a rennovation or improvement.
So say someone takes 40k out of the equity and builds a 30k extension. Spent 5k on a holiday, kept 5k back.....as most people would.
SMI would be paid on the 40k. There literally is no way, and I doubt, any interest in persuing for evidence that every penny was spent on the house.
The main point of SMI is to keep people in houses. Not spend ages going through years of accounts to find out where the 40k was actually spent. In itself, it would be a time consuming nightmare. Though may improve public sector employment.
i really do think this forum is for people that can't afford to buy the Daily Mail any more...0 -
Surely paying someone's mortgage interest is more cost efficient than letting them be repossessed and then having to house via social housing or privately with housing benefit?
I agree it should not affect capital at all.
The reason they pay off some mortgage holders capital is because it is cheaper to do it that way especially now that the rate doesn't even cover the interest payments for many.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
so one person does it and everyone who is claiming SMI is doing it... yes ok then...
i really do think this forum is for people that can't afford to buy the Daily Mail any more...
Maybe Dev should be a good citizen and report him/her?'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
At last, some numbers!
Cost from the link of extending SMI is £110M for the next year.
Outstanding morgage debt is around £1.2 trillion, i.e. £12,000 million
So the effect of SMI is the proverbial drop in the ocean. In fact it's a homeopathic dilution of a drop in the ocean. There is absolutely no way at all that that amount of money can have the slightest effect on house prices. Not even when applying Graham's "basic sense".
It doesn't even cost very much. £110M is peanuts.
So why do Bears obsess about it?
Because it's something someone else might get that they don't. It seems unfair to them that someone might be given a benefit that they can't get, and they're as envious as hell. You can see that throughout the thread - not one single bear has asked how much this costs collectively and whether or not it's worth worrying about (it isn't), they're obsessed by the idea that someone "undeserving" might be claiming it and the crazy idea that it's sustaining house prices.
SMI is a non issue as regards HPI. It happens to be a reasonable benefit to pay to avoid the disruption of people being repossessed during short periods of unemployment, and saves costs associated with rehousing. And for people who have paid NI when in work, it's not all that unreasonable they get some of it back when unemployed, is it?0 -
actually i'd check what the average mortgage rate is. there are of course exceptions but it isn't 3.7%.
please try again.How SMI is calculated
The standard interest rate used to calculate SMI is currently 3.63 per cent.
From 1 October 2010 the standard interest rate is set at a level equal to the Bank of England’s published monthly average mortgage interest rate. The starting rate that applies from 1 October 2010 is 3.63 per cent (the rate published by the Bank of England on 31 August 2010).
Source http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_180321
Oh dear, crocky.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
The reason they pay off some mortgage holders capital is because it is cheaper to do it that way especially now that the rate doesn't even cover the interest payments for many.
Is that so? Evidence?Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
Surely paying someone's mortgage interest is more cost efficient than letting them be repossessed and then having to house via social housing or privately with housing benefit?
I agree it should not affect capital at all.
AGHHHHH
People should have the right to exist, not the right to quality of life as the expense of others.0 -
not another one that is hard of reading... that wasn't what you and that Devon bloke were trying to claim that SMI made capital repayments for mortgage holders... it isn't true.
please try again !!!!!!0 -
AGHHHHH
People should have the right to exist, not the right to quality of life as the expense of others.
I should imagine this Tory govt will provide the minimum quality of life they can get away with at the ballot box in our wonderful democracy.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0
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