CHANGES TO SUPPORT WTH MORTGAGE INTEREST IN 2018

13th October 2017

Are you receiving income related benefits?

Do you have a mortgage on your own home?

Does the benefit Agency help with your mortgage payments?

If yes to all the above then you need to know about these important changes coming to Northern Ireland that will affect you in 2018.

Support with Mortgage Interest (SMI) is a payment made by the government to help people on income related benefits pay the interest on their mortgage repayments. There are currently 11,200 claimants in NI of which 8,100 are working age and 3,100 are pension age according to the Department of Communities in Northern Ireland.

SMI is changing from a benefit to a loan on April 6th 2018.

Regulations are being drawn up, so that from April 6th 2018 the government will no longer pay claimants SMI to help with their mortgage interest costs. If on that date a claimant is in receipt of income related benefits (income support; Income based ESA; Income based JSA, Pension Credit or Universal Credit), they will be invited to apply for a loan to help manage the cost of their mortgage interest. This will have to be repaid to the government on sale or transfer of the customer’s home.

It is expected these changes will mean:

Interest payments are still paid directly to the lender and capital repayments are made by the claimant as before.

If you get support with your Mortgage Interest (SMI), you’ll get a letter by February 2018 telling you about the loan and other options available to you.

For those of working age there is a £200,000 cap on interest that can be paid.

For those of pension age there is a £100,000 cap on interest that can be paid.

The loan plus interest will be held as a charge against the property which is to be repaid on the sale / transfer of the home or the death of the claimant.

The interestis estimated at 2.6%.

There are noprotections or supplementary payments for existing clients of SMI

There will be no credit check as part of the eligibility criteria.

The SMI Department cannot force the sale of a property. A charge will be placed on the property and if there is no positive equity to re-coupe the loan is written off.

Claimants can withdraw from the scheme at any time.

Claimants must be receiving a qualifying income related benefit for 39 weeks to qualify for SMI – the same rule as before.

The loan canbe backdated to April 6th 2018 to avoid breaks in previously endingclaims.

For more advice please contact your local WAVE welfare advisor for updates as they happen, or visit:

https://www.gov.uk/support-for-mortgage-interest/what-youll-get

(*Info taken from the department of communities briefing 4/7/17 and www.gov.uk)