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Mortgage SMI Payment is now a loan

Mortgage SMI Payment is now a loan

Mortgage SMI Stressed Man about mortgage sitting on log with white shirt - support for mortgage interest

Mortgage SMI Payment is now a Loan. Support for Mortgage Interest Payment (SMI) was previously a benefit for those who found themselves in reduced circumstances to pay the interest only component on their mortgage.

On April 6th this year the DWP have turned SMI from benefit to a loan. This means that for those who find themselves in a situation where they lose their job due to illness, redundancy and are eligible for, it will need to pay back the SMI component of benefits they receive.

Some key facts on SMI

– The maximum available under the scheme was for the first £200,000 (£100,000 if on pension) for interest only, not the capital sum.

– The SMI is secured against the property and will be recouped when either the recipient passes away or the home is sold.

– The maximum amount of time jobseekers can claim is for 2 years.

– The SMI loan will accrue interest at gilt rate.

– If you have more than £16,000 threshold in savings or investments you will be ineligible for SMI and most other benefits. The state expects you to live off this amount until it is reduced to below the threshold level.

Mark Weymouth’s take “The government’s decision to further reduce benefits shows why protection needs must be reviewed to ensure hard earned gains are not lost over short-term issues.”

Discuss your protection needs with one of our experts, arrange a callback now.

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