The Support for Mortgage Interest scheme, due to expire next month, has been extended until 2015/16.
The extension of the scheme, announced in today’s Autumn Statement, will cost an extra £10m in 2012/13, followed by £95m in 2013/14 and £90m in 2014/15.
The Autumn Statement report states: “Temporary changes to SMI are extended until 2015/16 for working age SMI claims. The waiting period will remain at 13 weeks and the working-age capital limit will remain at £200,000 until 31 March 2015.”
SMI was previously calculated at 6.08 per cent, but in the emergency 2010 Budget it was cut by 40 per cent. Since October it has been calculated at the Bank of England’s average mortgage rate, currently 3.63 per cent.
Council of Mortgage Lenders director general Paul Smee says: “Today’s announcement provides a welcome extension of support for homeowners currently receiving income related benefits, as well as helping lenders to extend forbearance to those waiting to qualify.”