SMI rate

ClaireP1977

The current rate for SMI help is 2.09% and has been set at this since April 21.

Is this likely to be increased to align more closely to the BofE base rate? 

It hasn't changed for over 18months and the rate is just not reflective of the interest on mortgages after 8+ rate increases over the last year..

I'm falling behind on my mortgage month on month whilst I'm long term sick.

I see the govt. has increased the rate of interest we pay on the loan but not the rate they help us with.

Bonkers

silvercar

It isn’t the government that has increased the rate you pay on the loan it is your mortgage provider. Had you been on a fixed rate your payments wouldn’t have changed. If you have any spare income to throw at your mortgage that would be worth doing to prevent falling behind. Otherwise it’s a question of speaking to the lender and seeing what they can do to help.

housebuyer143

silvercar said:

It isn’t the government that has increased the rate you pay on the loan it is your mortgage provider. Had you been on a fixed rate your payments wouldn’t have changed. If you have any spare income to throw at your mortgage that would be worth doing to prevent falling behind. Otherwise it’s a question of speaking to the lender and seeing what they can do to help.

I think they mean that the government has increased to interest on the loan to be paid back when the property is sold. SMI is a loan from the government.

silvercar

housebuyer143 said:

silvercar said:

It isn’t the government that has increased the rate you pay on the loan it is your mortgage provider. Had you been on a fixed rate your payments wouldn’t have changed. If you have any spare income to throw at your mortgage that would be worth doing to prevent falling behind. Otherwise it’s a question of speaking to the lender and seeing what they can do to help.

I think they mean that the government has increased to interest on the loan to be paid back when the property is sold. SMI is a loan from the government.

I see, I hadn't realised that. 

fatbelly

It should be raised. I thought I'd heard that it was going up to 3% in January but I can't find confirmation of that.

ClaireP1977

I'm on interest only at the minute and my mortgage tracks the BofE base rate

OhWow

ClaireP1977 said:

I see the govt. has increased the rate of interest we pay on the loan but not the rate they help us with.

Bonkers

According to the gov.uk link, your repayment loan interest is only 1.4% at present.

"The interest you pay can go up or down, but the rate will not change more than twice a year. The current rate is 1.4%. You’ll be told if this is going to change."

https://www.gov.uk/support-for-mortgage-interest/repaying-your-loan

ClaireP1977

Hiya, yes it is currently but changing in Jan-23

"The current rate of interest is 3.03 per cent from 1 January 2023. This rate can go up or down but it won't change more than twice a year and you will be told if it's going to change."

Given that there has been such a significant change in the BofE base rate since the 2.09% that was set in Apr-21 - does anyone know if this will be increasing?

housebuyer143

ClaireP1977 said:

Hiya, yes it is currently but changing in Jan-23

"The current rate of interest is 3.03 per cent from 1 January 2023. This rate can go up or down but it won't change more than twice a year and you will be told if it's going to change."

Given that there has been such a significant change in the BofE base rate since the 2.09% that was set in Apr-21 - does anyone know if this will be increasing?

Hang on.. how can they charge you 3% but only give 2% as the support payments? 

It seems like potentially they are due to increase it then at the same time, otherwise that's really messed up. 

ClaireP1977

My sentiment exactly housebuyer45

sammyjammy

https://forums.moneysavingexpert.com/discussion/6404490/support-for-mortgage-interest