Mortgage Interest Benefit Being Replace With A Loan

Your home is no longer a castle it seems. 

The Conservatives are abolishing the free Support for Mortgage Interest benefit in its current form, replacing it with a loan secured on people’s homes.

The unemployed are on risk of being pushed futher into debt. If there is no equity in the property lenders will be more inclined to reposses your home.

Around 124,000 people currently receive the benefit to help towards interest payments if they have lost a job or stopped work through disability or illness.

The Money Advice trust charity said it could mean many more people struggle to keep their homes when interest rates rise in future.

But the government says lower-paid taxpayers should not be subsidising people able to afford their own homes.

The changes became law on July 27, with future recipients of the new mortgage interest loans or their families expected to pay them back - with interest.

Any homeowner who loses their job, falls ill or sees their income drop from this summer onwards will only be able to take out a loan.

The rollout date of April 2018 means they will be the first group potentially affected if they need to claim.

The timelag is because recipients will only be able to apply 39 weeks after they start receiving the benefits that make them eligible - down from 13 weeks under Labour.

“Millions of homeowners have never experienced a rise in interest rates. With wages being squeezed and household borrowing soaring, many could find themselves in financial difficulty if circumstances change.”

London house prices suffered a sharp slowdown in the second quarter. Annual price growth in the capital dropped to 1.2% between April and June, from 5% in the previous quarter. It was the slowest growth since 2012 and fell below the 2.8% rise across the country in general.