Mortgage Support Cut To Hit Elderly Hardest

The Government has revealed the rate of mortgage interest support is to be cut from 6.08% to 3.63% as part of a package of measurs to reduce the public deficit. The interest payments, which are paid to 227,000 low-income families, will drop by £80 on average to £120. The concession was due to end on 31st December 2010 but the new Government decided to bring it forward. The Government said the 40% reduction in mortgage support will save taxpayers £200 a year.

However, Department for Work and Pensions figures show that more than half of those currently benefitting from the support are receiving pension credit and will find it difficult to supplement their incomes to compensate for the drop.

Housing charity Shelter has warned that the inevitable outcome of the new rules is an increase in debt problem and house repossessions . Roger Harding, head of Policy at Shelter said “For someone on a mortgage of £150,000 they would have got £760 under the current system. Once the changes kick in that will drop to £456 a month that is a shortfall on their previous amount of £304 a month.” … “Sadly we will expect arrears to increase and some will be repossessed.”

To read the full article click here.