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Support for Mortgage Interest

Question for Department for Work and Pensions

UIN 121398, tabled on 5 January 2018

To ask the Secretary of State for Work and Pensions, what steps his Department has taken to make people in receipt of the Support for Mortgage Interest scheme aware of forthcoming changes to that scheme; and what assessment he has made of the long-term effect on the security of the recipients' homes as a result of people moving from a benefit to an interest-bearing loan.

Answered on

10 January 2018

A managed transfer process has begun with all existing recipients of Support for Mortgage Interest (SMI) benefit receiving information about the new scheme in advance. The exercise to give SMI claimants information about the new scheme began in July 2017 and will continue until mid-February 2018.

Claimants are given information about how the SMI loan will work, about alternatives to the loan and organisations that can offer further information. This is followed up by a telephone call to explain the information and answer any questions. A leaflet containing Frequently Asked Questions is issued to support this informed discussion.

SMI loans will be available to all claimants who currently qualify for SMI as a benefit. The new loans scheme will continue to provide robust protection against repossession to all eligible claimants in times of need. The level of support available will be calculated in the same way as under the current system and claimants and mortgage lenders will not see any difference in the payments they receive. There is no reason to expect lenders to behave any differently to now and we do not anticipate that this measure will lead to an increase in the number of homes that are repossessed. Claimants may change their mind whether to take or decline a loan at any time.

Recovery of SMI loans will not be pursued until the property is sold or transferred. If the amount of equity available after the sale of the property is less than the amount due to be recovered the balance will be written off.

Named day
Named day questions only occur in the House of Commons. The MP tabling the question specifies the date on which they should receive an answer. MPs may not table more than five named day questions on a single day.