Pension Credit and housing costs where the mortgage term has expired

We have a client who had an interest only mortgage, but who had not paid into an endowment policy so at the end of the term was left with a large amount owing. The lender had agreed to come to an arrangement with the client to repay, rather than repossess, but but we are not sure of the details of this agreement, and as far as we are aware the client has not actually been paying anything. Although the original mortgage term has expired, our client is still liable for the housing costs, and she is now asking whether she would be eligible for help with these costs with Pension Credit. Does anyone have any ideas?

The SPC regulations 2002, Schedule 2 (11) say

Loans on residential property
11.—(1) A loan qualifies under this paragraph where the loan was taken out to defray monies applied for any of the following purposes–
(a) acquiring an interest in the dwelling occupied as the home; or
(b) paying off another loan to the extent that the other loan would have qualified under head (a) above had the loan not been paid off.

So, as long as liability to pay interest is still there then the loan should qualify.  The notional term has no relevance.

You should though read CPC/3322/2007 about capitalised arrears which may have been applied by the lender.

That’s helpful thanks