MLA warns of hardship as mortgage interest benefit to become loan

Mark H Durkan.
Mark H Durkan.

SDLP Foyle MLA Mark H Durkan has warned that the support for those with a mortgage and claiming benefit is to change dramatically.

The Department for Communities has confirmed that mortgage interest support will now change from a benefit to a loan for all existing and new applicants from next Spring.

Mr Durkan said: “This means that from April 6, 2018, all existing and new claimants getting an income-based benefit and deemed by the Department for Communities as entitled to help, will be offered a loan.

“Those who accept this loan will have to repay it with interest when the property is sold or ownership transferred. Those who don’t will have to make alternative arrangements with their mortgage provider to make payments in order to stay in their home. In real terms, this means further financial hardship for people who have, for one reason or another, fallen on hard times.

“Given our current housing crisis, where we have thousands of families on social housings waiting lists and nowhere near enough homes being built, supporting people to keep their homes is very important.

“This is an element of Welfare Reform that people here are full opposed to, despite the claims of some parties that they had secured full protection against these cuts and that people would not be affected.”

A Department for Communities spokesperson confirmed the changes are to take place. He said: “In the Summer Budget 2015, the Chancellor announced that Support for Mortgage Interest will be changed from a benefit to a loan, secured by a charge on a claimant’s property.

“This means that from April 2018 claimants of Support for Mortgage Interest will have to repay the Support for Mortgage Interest they borrow, with interest, from any remaining equity when the property is sold or ownership is transferred.

“From April 6, 2018 all existing benefit claimants (Pension Credit, Income Support, Jobseeker’s Allowance income based, Employment and Support Allowance income related and Universal Credit), who get help with their mortgage interest costs (and other eligible housing costs), and all new claimants who qualify for help with mortgage interest costs (and other eligible housing costs), will be offered Support for Mortgage Interest in the form of a loan rather than a benefit.”

If there is not enough equity left to repay the loan, no further action will be taken by the Department for Communities.