Hi All,

Scratching my head on this one - thought someone could advise if the rules have changed in my client's favour!

I have a client who has had an interest and capital repayment mortgage for a number of years. Last year he stopped working and applied for IB and then JSA. He has been receiving mortgage interest payments for some time but these are not high enough to cover the total monthly payment due and he is being threatened with repossession of the property by his mortgage provider (case due to be heard in court in the next month).

It has been suggested that he would be better off (short-term at least) changing his mortgage to an interest-only one.

My question is that if he does this - and the mortgage interest payment due increases as it undoubtedly will - would this be paid via Income Support or would he be stuck with the current level of payment of mortgage interest relief?

I'm aware that it used to be the case that you couldn't change your mortgage to 'take advantage' of the mortgage interest relief scheme - has this changed in the current climate?

Any and all help greatly appreciated.

Mairi

At the moment, he will be paid 6.08% (from memory) of the capital outstanding as SMI. If he stops paying capital back then he will have less outgoings but the same income IF he stays on the same interest rate.

Thanks Gareth,

That's made it clearer for me as I realised that I was expecting the interest due each month to increase and I've realised that it might not unless he capitalises his arrears and increases the loan.

Mairi