Support for Mortgage Interest scheme extended

| December 10, 2009 | 0 Comments

In yesterday’s pre-Budget report, Chancellor of the Exchequer Alistair Darling confirmed that the Government’s Support for Mortgage Interest scheme will be extended for another six months.

The scheme was introduced earlier this year, with the intention of helping mortgage borrowers remain in their homes if they suffer a temporary fall in income, but are expected to recover at a later date.

For those who qualify, it allows up to 70% of mortgage interest payments to be deferred on loans of up to £200,000.

According to the Chancellor, over 220,000 people have been helped so far.

Commenting on the extension of the scheme, Mr Darling said: “There will, of course, be a cost to this … but the cost to families of losing their home would be immense. And it would be a false economy for the country.”

In related news, the Council of Mortgage Lenders (CML) recently cut its forecast for the number of repossessions in 2009 to 48,000.

The estimate is substantially down on earlier forecasts of 75,000 in 2008 and 65,000 in June of this year, and the body said the improvement reflects “lender forbearance, government measures and the beneficial effect of continuing low interest rates”.

CML figures also show that at the end of September, 194,600 home loans (1.77% of all UK residential mortgages) were in arrears of 2.5% or more of the outstanding balance.

The result compares with 204,200 mortgages in arrears on the same basis at the end of June, or 1.86% of all mortgages.


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