Support for Mortgage Interest Loans

ended 11. January 2022

This morning at 09:30 the Office for National Statistics is publishing new data on Support for Mortgage Interest (SMI) Loans. As far as I'm aware it's the first time this data has been released. In your experience…

  • Do many people use SMI loans alongside their mortgages? 
  • How common are they?
  • What are the advantages/disadvantages?
  • Are many borrowers aware they even exist?

The data will drop here at 09:30. I'll leave the alert open until 10:00 so you can have a quick scan if you are free. Otherwise just answer the Qs above. Any other views or intel, add it in.

2 responses from the Newspage community

Legend
Scott Taylor-Barr
Financial Adviser at Carl Summers Financial Services
"Support for Mortgage Interest loans are the way the welfare system now supports those who have little or no income, but do have a mortgage. This will include the long term unemployed and those with serious illnesses, or disability. They replaced the previous system of grants and benefits with the extra help to pay your mortgage becoming a loan. Many homeowners are unaware of this change and the impact it can have on them financially, if they ever have to rely on Government benefits at any point in their lives. It is rare to see anyone with an SMI as a mortgage broker, as someone in this situation would generally not contact us - most people see us as only being there for moving house or looking at a remortgage. However, many advisers will be more than happy to help existing customers who have fallen into difficulty. "For the most part a good mortgage broker or adviser will try to stop their clients from needing to take on an SMI in the first place, by recommending they take out appropriate insurance to help protect them from the financial destruction that a serious illness, or accident can do when they initially take on the new mortgage."
Premium
Robert Payne
Director at Langley House Mortgages
Support for mortgage interest was a scheme I learnt about when I was training to become a mortgage adviser in 2015 and I haven't heard it mentioned since then, apart from that it is now a loan with interest payable. I would be surprised if many borrowers were aware of it and I would suspect that most people who use it have been advised to use it by support networks. The loan is designed to help borrowers pay the interest on their mortgage but to qualify you usually need to be receiving certain state benefits and have income below a set amount. The payments are made directly to the lender and the loan doesn't appear on your credit report which should mean it doesn't affect future affordability or credit score. My concern with it is whether that turns out to be true, lenders may be skeptical to take on a borrower who has received this kind of support in the past, much like the government grants that were received during the pandemic!