Summer Budget 2015 : SMI changes, support for mortgage interest.

glennamy

BigAunty wrote: »

But with property price inflation and perhaps with a bit of downsizing or moving to a cheaper area, its possible to sell up and buy a new property outright. This is despite the fact that only the interest part of the mortgage is paid off.

Not every SMI claimant is on an interest only mortgage. I do recall one poster on this forum who was on a repayment mortgage who said their other benefits covered the remaining mortgage expense, assume they had a small mortgage and/or high benefits.

In that particular case (and I don't imagine its a common one) essentially the taxpayers were wholly funding their entire remaining mortgage balance.

Once your mortgage payments get to a small amount (around 5k) I think SMI stops, as the interest is minimal and you take it on completely. Yes, if a person was in a position to downsize might be able to play the system as you quoted, but it would stop at their new address, but the system is in place because it would cost more to rehouse a family in social housing etc that it would to pay their interest, also remember people that have mortgages in the first place are workers, you cannot get a mortgage if you have no steady income and a good work history. People that have mortgages fall into this position either through disability, illness or redundancy, not through being workshy, as the press likes to shout about.

glennamy

marliepanda wrote: »

Also incorrect as the rate paid by SMI is over 3% and many pay less than 1% interest.

Facts straight before speaking always helps.

If people in the last six years of record lows managed to get such a low rate, then they still do not get their mortgage paid off.

How many working people do you know who manage to get a mortgage, locked with fantastic low interest, then decide or want to 'lose' their jobs through choice, then think they can use the smi to pay off their mortgage?

I actually do not think this change in SMI is a bad thing, it still allows the person and their family, who was a worker to stay in their own home until their circumstances improve, but it was put in place to save the government money in rehoming and paying HB.

I'd also love to see the figures of these 'people' you quote who can pay a mortgage through SMI, the interest is only a fraction of the lump sum. I await those figures with interest - no pun intended!

Ignorance, or just reading/re-quoting the right wing media outlets does not give you the correct answer.