To ask the Secretary of State for Work and Pensions, what assessment he has made of the effectiveness of the Support for Mortgage Interest scheme at supporting homeowners with rising mortgage costs.
Answered on
8 September 2023
SMI provides reasonable support by making a contribution towards mortgage interest to protect claimants against the threat of repossession. The rate of SMI is based on the average mortgage rate published by the Bank of England and recently increased from 2.09% to 2.65% in May 2023. Any further changes will occur when the average mortgage rate differs by 0.5 percentage points or more from the rate in payment.
To support mortgage borrowers with rising interest rates, on 3 April 2023, we extended SMI by offering Universal Credit claimants a loan after three months, instead of nine and extended to in-work UC claimants.
No assessment has been made of the adequacy of Support for Mortgage interest (SMI) since interest rates have risen, although the Department continues to monitor the impact of our policies on an on-going basis.