The Council of Mortgage Lenders (CML) is urging the Government not do reduce further the recent 40 percent cut in the rate of income support for mortgage payments.
If you are a homeowner and are receiving Pension credit, income support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, or Pension Credit you will be eligible for help towards mortgage interest payments. The payment is paid directly to the lender and the standard rate used to calculate Support for Mortgage Interest is currently 3.63 percent.
The Government is set to discuss further cuts to this benefit in its forthcoming comprehensive spending review, from which the last already reduced the rate from 6.08 percent to the present rate of 3.63 percent.
The CML hopes the 13-week qualifying period for payments will remain so households receiving the benefit do not come under greater financial pressure.
“A combination of low interest rates and the concerted efforts of borrowers, lenders and the government have brought about a reduction in arrears and possessions, despite the economic slowdown,” said Michael Coogan, CML director general.
“Continuing government support, including the funding of debt advice, is vital in helping people in their homes.”
Latest UK Debt Figures
The latest UK debt statistics from Credit Action show that the average household in the UK has a debt of £56,690 including mortgages.
The total UK personal debt at the end of August 2010 stood at £1,428bn, indicating that individuals now owe more than what the whole country produces in a year.
UK banks and building societies wrote off £10.9bn of loans to individuals in the last year to the end of the second quarter 2010. In the second quarter of the year lenders wrote off £3.47bn alone, £2.14bn of which was credit card debt.
Total secured lending on dwellings at the end of August also stood at £1,240bn – the twelve-month growth rate remaining at 1.0 percent.
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