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SMI cuts threaten many with homelessness

With the imminent cuts in the Government's spending review, predicted job losses and record high jobless figures, the Government is now proposing to cut the Support for Mortgage Interest (SMI) scheme - leaving thousands of Northern Ireland homeowners facing repossession.

The SMI scheme assists unemployed people receiving benefits with their mortgage interest payments. The scheme originally calculated mortgage interest at a fixed figure of 6.08%, but in June 2010 the emergency Budget set out that it will be decreasing to 3.63% from October 1. This will leave many unemployed SMI-reliant homeowners, already struggling to make ends meet, at risk of plunging into arrears and losing their homes.

Since November 2009, Advice NI's Debt Action project has dealt with 1,224 clients with almost £19m-worth of debt, 159 mortgage arrears cases totalling £1.9m and the fear is that it's going to get worse.

For illustrative purposes, a family with two children on benefits with a £100,000 interest-only-mortgage at 5% will have a monthly shortfall of £114.16. This amounts to approximately 12% of their typical monthly income on benefits. Advice (NI) clients who are jobless due to the economic situation are already under extreme financial pressure and the cuts could mean they have to find up to £200-per-month extra, depending on their mortgage arrangements.

Anyone currently receiving the Support for Mortgage Interest scheme who is concerned should seek help from Advice NI.


Advice (NI), Belfast


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