The Council of Mortgage Lenders has urged the Government not to make further cuts to income support for mortgage interest payments when it conducts its forthcoming spending review.
A 40 per cent cut in the rate for income support to cover borrowers’ mortgage payments is due to come into effect today. The trade body is also urging the Government to maintain the current 13-week qualifying period for payments instead of reverting to the previous 39 weeks.
The CML says there is a case for reducing the rate from 6.08 per cent to 3.63 per cent but the decision means fewer borrowers will receive payments covering their mortgage interest in full, and all households receiving the benefit will come under greater financial pressure.
It has also reassured borrowers lenders will continue to treat them sympathetically if they experience payment problems but urges customers who experience difficulty in meeting their payments to contact their lender as soon as possible.
CML director-general Michael Coogan (pictured) says: “A combination of low interest rates and the concerted efforts of borrowers, lenders and the government have brought about a reduction in arrears and possessions, despite the economic slowdown. Paying benefit at a lower rate will put extra pressure on household finances, and any borrower anticipating payment problems should talk as soon as possible to their lender, who will treat them sympathetically and try to work out a solution with them.”