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exiges

Mewing While Smi'ing

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Given there's "no end in sight" in SMI payments for the over 60s.. there will be a point where their mortgage is completely repaid.. but what if they decided to MEW just before the end .. say releasing another £10-20k.. could they do that ?

Particularly on offset mortgages where there's a fluidity to the funds, you can often withdraw funds so long as you keep up your repayments without even talking to the bank.

That'd be a nice tickle.

Edited by exiges

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It would be good for the economy!

think of all that spending - all that extra GDP. :)

Although, they should do it quickly as Cruis Price Inflation is running a bit high these days

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I may be wrong but I think SMI is based on the size of loan secured on the property, not what you paid for it.

So yes, it does create a perverse incentive to get into maximum debt and become unemployed or get moved to lower pay. This means you become better of, especially when the state was paying 6% of the outstanding loan and the bank was only asking for half that.

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forgive my ignorance but what does 'SMI' stand for and what is it?

Support for Mortgage Interest. Pledge made by Brown when interest rates and unemployment went up that nobody would lose their home. Therefore the taxpayer pays the mortgage for anyone who can't afford the repayments. Except the taxpayer pays MORE than the mortgage holder needs to pay the bank, so the claimant makes a nice profit. Also the SMI payment is linked to the loan size, which in many cases is far greater than the cost of the house (includes a couple of cars, holidays and plasma TV). That Mr Brown was such a nice chap.

Apologies to any SMI claimants. I'm sure it's not as generous as I and others make out. We just want the taxpayer largesse to spread a bit more evenly.

Edited by ingermany

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SMI ends in 24 months..doesnt it...24 months from your first claim..and doesnt start for 3.

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SMI ends in 24 months..doesnt it...24 months from your first claim..and doesnt start for 3.

There is no limit to how long you can get SMI if you are getting:

•Income Support

•income-related Employment and Support Allowance

•Pension Credit

(2 year limit only applies to those on income related jobseekers allowance).

So basically it seems to be an open ended money generator for anyone with a mortgage.

The real gripe I have with it is that it is a transparent subsidy designed to prop up house prices. It means that people who can't afford to pay for their house do not need to sell it at a realistic market price. It keeps houses off the market and stops prices from falling. Using our taxes for the purpose. To me it seems fundamentally immoral.

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Is this not one of the benefits they are currently targeting?

There is a thread on MSE where a few luvvies are complaining that there payments are to be cut....Some even say they cannot make ends meet!!

Anyway I would expect this to be in the big announcement next Month

MSE Thread

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Is this not one of the benefits they are currently targeting?

There is a thread on MSE where a few luvvies are complaining that there payments are to be cut....Some even say they cannot make ends meet!!

Anyway I would expect this to be in the big announcement next Month

MSE Thread

What a thread - all those head in the sand people who didn't prepare for this change. A lot are saying they will be repossessed and have to go into rented, which will cost the government more in benefits. So once again, it is the terribly high level of rents that scuppers the system and any savings for the state.

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I may be wrong but I think SMI is based on the size of loan secured on the property, not what you paid for it.

Right, but imagine a pensioner has a £100k mortgage, and with big SMI overpayments courtesy of the tax payer that debt is reduced to £50k.. they could MEW (or draw money down again using an offset mortgage) and go back to £100k. Free money.

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Support for Mortgage Interest. Pledge made by Brown when interest rates and unemployment went up that nobody would lose their home. Therefore the taxpayer pays the mortgage for anyone who can't afford the repayments. Except the taxpayer pays MORE than the mortgage holder needs to pay the bank, so the claimant makes a nice profit. Also the SMI payment is linked to the loan size, which in many cases is far greater than the cost of the house (includes a couple of cars, holidays and plasma TV). That Mr Brown was such a nice chap.

Apologies to any SMI claimants. I'm sure it's not as generous as I and others make out. We just want the taxpayer largesse to spread a bit more evenly.

It isn't entirely fair to blame Brown for it as government SMI in one form or another dates back to the late 1940s. All Brown and numerous previous governments have done is to tweak the rules. As I've pointed out on here before, the SMI scheme in place up to the mid 1990s was arguably more generous than the current one, didn't prevent a price crash though.

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  • 246 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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