September 24, 2010
Expected government cuts to schemes which help the unemployed with mortgage payments could leave thousands facing repossession, experts have warned. The Support for Mortgage Interest scheme (SMI) originally calculated mortgage interest at a fixed rate of 6.08% but June’s emergency Budget announced plans to slash that figure down to 3.63% from 1st October this year - in line with the Bank of England's monthly average mortgage interest rate. According to Northern Ireland-based financial advice agency Advice NI, the changes could affect thousands of households through the UK, forcing many homeowners to find an additional £200 per month in some cases to meet mortgage repayments. "Inevitably this situation is going to place households already in receipt of the lowest levels of income into severe hardship," said Head of Policy Kevin Higgins. "These households do not have any additional disposable income to meet this shortfall." SMI is normally paid directly to lenders and can only be used towards mortgage interest payments or for a loan to buy and improve a home. Homeowners may get help with mortgage interest payments as part of their benefits, if they are a homeowner and are getting: Income Support Income-based Jobseeker’s Allowance Income-related Employment and Support Allowance Pension Credit Those worried about how October’s changes could threaten their home should seek advice as soon as possible and ward of any dangers of repossession.