Support for mortgage interest rate change

Tulip99

does anyone know how the smi interest rate (2.09%) changes. I will be repossessed if the rate doesn’t go up

sammyjammy

Did you post this yesterday?  I tried to find the answer for you but failed.  I've had another look again today and it just says the rate is variable and there is nothing to suggest a fixed timetable as to when it changes.

Perversely the interest charged on the loan by dwp is clearly set out as being reviewed twice a year in June and December.

Print Support for Mortgage Interest (SMI): Overview - GOV.UK (www.gov.uk)

poppy12345

sammyjammy said:

Did you post this yesterday?  I tried to find the answer for you but failed.

They did here. https://forums.moneysavingexpert.com/discussion/6389995/smi-loan-interest-rate-change#latest with no replies.

Tulip99

Many thanks for trying. I’m new on here and don’t really know what I’m doing. Yes I posted it 2 days ago and had no replies.
 I don’t think many people are in my situation, I am receiving disability payments only as my income and I am now expected to find more than £500 monthly. The only way I’ll be able to keep hold of my house is by the rate going up.

Tulip99

Shelter online says ‘the current rate is 2.09%. The rate is adjusted whenever the Published Rate and the SMI rate differ by 0.5% or more.’??????

poppy12345

Tulip99 said:

I am receiving disability payments only as my income

Are you currently claiming all the benefits you're entitled to? You must be claiming a means tested benefit to be able to claim SMI.

Marcus99

Hi Tulip99, Sorry to hear about your situation. I'm also on SMI and getting also very worried about being able to afford to keep up my mortgage payments.

I found this page on the main MoneySavingExpert site and according to that there's a 2 month lag before SMI increases. Mind you if that's the case then I'd have thought the previous Bank of England rises should have kicked in by now.  

As I'm new to this forum I can't post the page link but it's the mortgage arrears one.

"This means as mortgage rates go up, the SMI rate will too, so you won't have to pay the shortfall. Similarly, it will go down if mortgage rates drop – though the change only takes place a couple of months after the target's hit."

sammyjammy

Tulip99 said:

Shelter online says ‘the current rate is 2.09%. The rate is adjusted whenever the Published Rate and the SMI rate differ by 0.5% or more.’??????

Interesting that Shelter states that but gov.uk says nothing,  I found loads about the interest rate charged on the loan changing but not the SMI.  

sheramber

The current interest rate is 2.09%, although it's subject to change each time the Bank of England average mortgage rate moves by at least 0.5% away from the current SMI rate.

https://www.moneysavingexpert.com/mortgages/mortgage-arrears-help/

Marcus99

Hi Tulip99, Sorry to hear about your situation. I'm also on SMI and getting very worried about being able to afford to keep up my mortgage payments.

I found this page in the main MoneySavingExpert site and according to that there's a 2 month lag before SMI increases.  If that's the case then I'd have thought the previous Bank of England rises should have kicked in by now.  


"This means as mortgage rates go up, the SMI rate will too, so you won't have to pay the shortfall. Similarly, it will go down if mortgage rates drop – though the change only takes place a couple of months after the target's hit."

Marcus99

Sorry about my duplicate post above. I sent it by mistake and don't know how to delate it.