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With many mortgage interest rates now below 2%, there must be lots of people paying down their capital, thanks to the taxpayer, given that the SMI rate paid is 3.63%

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With many mortgage interest rates now below 2%, there must be lots of people paying down their capital, thanks to the taxpayer, given that the SMI rate paid is 3.63%

Historical trackers are generally base rate + 0.5/1.5. But SMI applies only up to £200k. On balance, I guess the number of those covering capital (or the amount of capital covered) is trivial.

Much worse five years ago, when the spread between base rate and SMI was almost 6%. Then the coalition slashed it.

SMI will track the base rate - but I don't expect rises for 10 years.

Edited by okaycuckoo

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Yes SMI is for mortgages up to ONLY £200,000, yes ONLY 8x the average UK wage. God forbid these people, say after taxpayer support for two or three years, should have to make a life-style change, sell and rent like many of the people who are working to pay the SMI. Still all part of the UK capitalist free market economy where the taxpayer pays £200,000 SMI mortgages, provides mortgage deposits and subsidies people buying £600,000 properties.

Ouch! That really stings you, doesn't it?

I understand. But, dude - life is a complex of subsidies and compromises. Deserve's got nothing to do with it.

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Ouch! That really stings you, doesn't it?

I understand. But, dude - life is a complex of subsidies and compromises. Deserve's got nothing to do with it.

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But surely all these subsidies work against anyone not getting them (but paying for them via taxation) and ultimately work against HPC happening.

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Housing benefit is my personal hated subsidy. Not only do I contribute to this subsidy that I dont qualify for out of my taxed income I then compete with other people for rental property who have this subsidy and can bid up rents.

But as im a self reliant working person I can go f**k myself because no way can the 25 billion paid in housing benefit a year ever be clipped as the rentiers would not allow it.

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SMI is paid to people in receipt of JSA, ESA, income support & pension credit. The two year cut of is only for people on JSA, All the other eligible benefits get SMI indefinitely.Pensioners can claim for properties up to 100k.

This article from 2012 states that over half of all SMI payments are made to pensioners

http://: http://www.thisismoney.co.uk/money/mortgageshome/article-2569205/Is-DWP-planning-SMI.html#ixzz33Klczq00

I wonder how many of the pension mortgages are IO too?

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SMI is paid to people in receipt of JSA, ESA, income support & pension credit. The two year cut of is only for people on JSA, All the other eligible benefits get SMI indefinitely.Pensioners can claim for properties up to 100k.

This article from 2012 states that over half of all SMI payments are made to pensioners

http://: http://www.thisismoney.co.uk/money/mortgageshome/article-2569205/Is-DWP-planning-SMI.html#ixzz33Klczq00

I wonder how many of the pension mortgages are IO too?

Probably many. I think the savings threshold is £16k. I wonder how the wrinkleys are hiding their savings? Most of them seem to think UK bricks and mortar mortgages are great - unless they're using HK crap for their tax free blah.

In the end, I think any manipulation of the state system is good - to the point that we agree to a system of basic income with eradication of benefits and a simplification of tax system

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SMI is paid to people in receipt of JSA, ESA, income support & pension credit. The two year cut of is only for people on JSA, All the other eligible benefits get SMI indefinitely.Pensioners can claim for properties up to 100k.

This article from 2012 states that over half of all SMI payments are made to pensioners

http://citywire.co.uk/money/interest-only-mortgages-why-the-government-is-on-the-hook/a626881

Thanks for the info, and the link.

However for qualifying pensioners, they can claim for outstanding mortgages up to £100K. (Not properties up to £100K).

It's therefore possible some pensioners are rattling around in £600K homes with a £50K-£99K mortgage still outstanding.

SMI is a means-tested social security benefit for low-income homebuyers that pays mortgage interest (but not capital repayments) currently on loans up to £200,000 or £100,000 for pensioners.

The other day I posted up an example of a retired pensioner (ex Estate Agent) who in 2010 went to the press moaning about the cut to SMI. How he has to top it up more on a £150K outstanding mortgage.

(Has pensioner SMI mortgage size allowance been cut recently?). Anyway he finally came to market with his house, and it's gone SoldSTC with the listing asking price at £220,000. I guess the towels over the tops of the sofa to protect from his gelled/greasy EA hair job. http://www.housepricecrash.co.uk/forum/index.php?showtopic=154787&hl=

Also some of those pensioner claimants, despite what they can claim, may be more inclined to look to downsize, recognising in many areas they could sell at toppy values for a crazy fortune. If they're smart enough to game the system with SMI, maybe they're smart enough to begin selling into the treble-peak. If they've not left it too late (MMR, 2 year fixes ticking up, etc).

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Thanks for the info, and the link.

However for qualifying pensioners, they can claim for outstanding mortgages up to £100K. (Not properties up to £100K).

It's therefore possible some pensioners are rattling around in £600K homes with a £50K-£99K mortgage still outstanding.

The other day I posted up an example of a retired pensioner (ex Estate Agent) who in 2010 went to the press moaning about the cut to SMI. How he has to top it up more on a £150K outstanding mortgage.

(Has pensioner SMI mortgage size allowance been cut recently?). Anyway he finally came to market with his house, and it's gone SoldSTC with the listing asking price at £220,000. I guess the towels over the tops of the sofa to protect from his gelled/greasy EA hair job. http://www.housepricecrash.co.uk/forum/index.php?showtopic=154787&hl=

Also some of those pensioner claimants, despite what they can claim, may be more inclined to look to downsize, recognising in many areas they could sell at toppy values for a crazy fortune. If they're smart enough to game the system with SMI, maybe they're smart enough to begin selling into the treble-peak. If they've not left it too late (MMR, 2 year fixes ticking up, etc).

indeed, there should have been a deferred element to a bail out for the pensioner and his banker lenders.

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Thanks for the info, and the link.

However for qualifying pensioners, they can claim for outstanding mortgages up to £100K. (Not properties up to £100K).

It's therefore possible some pensioners are rattling around in £600K homes with a £50K-£99K mortgage still outstanding.

The other day I posted up an example of a retired pensioner (ex Estate Agent) who in 2010 went to the press moaning about the cut to SMI. How he has to top it up more on a £150K outstanding mortgage.

(Has pensioner SMI mortgage size allowance been cut recently?). Anyway he finally came to market with his house, and it's gone SoldSTC with the listing asking price at £220,000. I guess the towels over the tops of the sofa to protect from his gelled/greasy EA hair job. http://www.housepricecrash.co.uk/forum/index.php?showtopic=154787&hl=

Also some of those pensioner claimants, despite what they can claim, may be more inclined to look to downsize, recognising in many areas they could sell at toppy values for a crazy fortune. If they're smart enough to game the system with SMI, maybe they're smart enough to begin selling into the treble-peak. If they've not left it too late (MMR, 2 year fixes ticking up, etc).

Mortgages up to 100k not properties up to 100k, yes (my bad - call that a Saturday night mistake ;) ) I think it's likely that several of these pensioner SMI payments are made to people who did at one time have their mortgages cleared and then mewed. To receive SMI all they had to say was that the money was used for home improvements, supply a few receipts of work (little if any checks are done) and SMI is then paid for the life of the loan. Some of these loans will be lifelong loans too.

Surely when the sale completes EA guy will have in excess of the 16k limit for housing benefit and whatever the pension credit limits is and will have to rely on the equity money to pay his rent?

EA guy has done ok out of all this, pity he will never see it that way as shock horror he will (might – there could be another loop hole we haven’t identified yet that allows people to have everything paid for them) have to pay his own bills and has been degraded from home owner to the lowly status of renter. Sad that he will never understand that with an IO mortgage, he was already renting. The only things that will have changed are his address, the LL’s name and now he has a few pounds in his pocket.

(though in defense of all renters, barr council & association the rental laws in the UK suck big time)

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Thanks for the info, and the link.

However for qualifying pensioners, they can claim for outstanding mortgages up to £100K. (Not properties up to £100K).

It's therefore possible some pensioners are rattling around in £600K homes with a £50K-£99K mortgage still outstanding.

The other day I posted up an example of a retired pensioner (ex Estate Agent) who in 2010 went to the press moaning about the cut to SMI. How he has to top it up more on a £150K outstanding mortgage.

(Has pensioner SMI mortgage size allowance been cut recently?). Anyway he finally came to market with his house, and it's gone SoldSTC with the listing asking price at £220,000. I guess the towels over the tops of the sofa to protect from his gelled/greasy EA hair job. http://www.housepricecrash.co.uk/forum/index.php?showtopic=154787&hl=

Also some of those pensioner claimants, despite what they can claim, may be more inclined to look to downsize, recognising in many areas they could sell at toppy values for a crazy fortune. If they're smart enough to game the system with SMI, maybe they're smart enough to begin selling into the treble-peak. If they've not left it too late (MMR, 2 year fixes ticking up, etc).

The banks will have insisted on it because it helps forbearance. It enables them to extend mortgages into retirement, instead of forcing sales at reduced prices. When my next-door neighbour lost his job he told me "RBS were very good about it, they extended my mortgage until I'm 73" i.e. passed his debt onto taxpayers.

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