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DWP housing costs loan
The 2.61% rate is the amount of the payments to the lender, matching the current SMI rate. The rate charged to the borrower is set by the OBR forecast of weighted gilt rates. Their next forecast will be set with today’s budget but would currently be 1.7%.
DWP Operation Stakeholders have been informed by DWP that the rate will be 2.61%. 1.7% would leave many claimants desperately short.
The figures are compounded monthly so the repayments, on the £2.51 a week current loan payment, would be
Charge and interest Total recoverable
Year 1 £1.21 £131.71
Year 2 £4.67 £265.67
Year 3 £10.43 £401.93
Year 4 £18.53 £540.53
Year 5 £29.00 £681.50
Year 6 £41.88 £824.88
Year 7 £57.22 £970.72
Year 8 £75.06 £1,119.06
Year 9 £95.44 £1,269.94
Year 10 £118.41 £1,423.41
Year 11 £144.00 £1,579.50
Year 12 £172.27 £1,738.27
Year 13 £203.26 £1,899.76
Year 14 £237.02 £2,064.02
Year 15 £273.59 £2,231.09
Year 16 £313.02 £2,401.02
Year 17 £355.37 £2,573.87
Year 18 £400.67 £2,749.67
Year 19 £448.99 £2,928.49
Year 20 £500.37 £3,110.37
Year 21 £554.87 £3,295.37
Year 22 £612.54 £3,483.54
Year 23 £673.43 £3,674.93
Year 24 £737.60 £3,869.60
Year 25 £805.11 £4,067.61
I’m not sure where you get £2.51 per week from.
I’m happy to be corrected, but monthly compounding would increase the amount owed?
My calculation, assumed that the total loan from DWP was £5,000 - not an unreasonable amount. Just over a year’s interest on a mortgage of £150,000 .
Sorry Neil, I read that as a mortgage of £5,000. On a £150,000 mortgage (substantial given that the average mortgage amount for pensioner loans is about £40,000 and for working age about £80,000) the figures would be :
Charge and interest Total recoverable
Year 1 £36.24 £3,951.24
Year 2 £140.17 £7,970.17
Year 3 £312.97 £12,057.97
Year 4 £555.79 £16,215.79
Year 5 £869.86 £20,444.86
Year 6 £1,256.38 £24,746.38
Year 7 £1,716.60 £29,121.60
Year 8 £2,251.78 £33,571.78
Year 9 £2,863.21 £38,098.21
Year 10 £3,552.19 £42,702.19
Year 11 £4,320.05 £47,385.05
Year 12 £5,168.14 £52,148.14
Year 13 £6,097.84 £56,992.84
Year 14 £7,110.54 £61,920.54
Year 15 £8,207.67 £66,932.67
Year 16 £9,390.67 £72,030.67
Year 17 £10,661.01 £77,216.01
Year 18 £12,020.20 £82,490.20
Year 19 £13,469.75 £87,854.75
Year 20 £15,011.21 £93,311.21
Year 21 £16,646.16 £98,861.16
Year 22 £18,376.20 £104,506.20
Year 23 £20,202.95 £110,247.95
Year 24 £22,128.07 £116,088.07
Year 25 £24,153.26 £122,028.26
Sorry Neil, I read that as a mortgage of £5,000. On a £150,000 mortgage (substantial given that the average mortgage amount for loans is about £40,000 and for working age about £80,000) the figures would be :
Charge and interest Total recoverable
Year 1 £36.24 £3,951.24
Year 2 £140.17 £7,970.17
Year 3 £312.97 £12,057.97
Year 4 £555.79 £16,215.79
Year 5 £869.86 £20,444.86
Year 6 £1,256.38 £24,746.38
Year 7 £1,716.60 £29,121.60
Year 8 £2,251.78 £33,571.78
Year 9 £2,863.21 £38,098.21
Year 10 £3,552.19 £42,702.19
Year 11 £4,320.05 £47,385.05
Year 12 £5,168.14 £52,148.14
Year 13 £6,097.84 £56,992.84
Year 14 £7,110.54 £61,920.54
Year 15 £8,207.67 £66,932.67
Year 16 £9,390.67 £72,030.67
Year 17 £10,661.01 £77,216.01
Year 18 £12,020.20 £82,490.20
Year 19 £13,469.75 £87,854.75
Year 20 £15,011.21 £93,311.21
Year 21 £16,646.16 £98,861.16
Year 22 £18,376.20 £104,506.20
Year 23 £20,202.95 £110,247.95
Year 24 £22,128.07 £116,088.07
Year 25 £24,153.26 £122,028.26