Thursday, Jun 24, 2010
A prop reduced?
Mortgage Strategy: SMI payments brought in line with BoE rate
George Osborne revealed in Tuesday’s emergency budget that Support for Mortgage Interest payments will now be set at the level equal to the Bank of England’s published average mortgage rate. From 2010 the standard rate used to calculate mortgage interest payments will change. The rate at which support for mortgage interest is paid is currently set at 1.58% above the Bank of England rate. It has been frozen at 6.08% since late 2008, although interest rates have fallen significantly.
Posted by wanderinman @ 05:59 PM (999 views) Add Comment
3 Comments
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1. wanderinman said...
http://england.shelter.org.uk/news/june_2010/bad_news_for_homeowners :
" In response to today’s budget announcement, Shelter chief executive Campbell Robb said: ‘SMI has been one of the key schemes in helping hold back the rising tide of repossessions. But the reality is that most people on SMI are on higher than average interest rates, so there is a real danger it will no longer help the people who need it most and could trigger a surge in repossessions.
Introducing a system where rates will change monthly will create additional uncertainty for thousands of people already struggling day to day. The only solution is to ensure that SMI is paid at the rate of interest that people are currently being charged.’ "
According to yesterday's Times (which I can't link to now with its paywall, so I'll quote from the paper copy in front of me): "From October, around 220,000 borrowers who are out of work and receiving help with repayments on the Government's Support for Mortgage Interest (SMI) scheme will see the interest rate that the government covers decrease from 6.08 per cent to the Bank of England's average mortgage rate - currently 3.67 per cent."
2. Exiges said...
I wish they would scrap the SMI entirely
3. Exiges said...
"From October, around 220,000 borrowers who are out of work and receiving help with repayments on the Government's Support for Mortgage Interest (SMI) scheme "
HOW MANY !!! I didn't realise the tax payer was paying for so many people to keep up house prices.