If made redundant & unemployed, what does mortgage interest relief amount to ?

[bogota400]

Theres a good posibility of being made redundant in the course of the next year or so. Whilst the objective would be to get working straight away, I'm just trying to work out whether I can keep my head above water if I have to go on state support.

I understand in the case of home owners - with there being no opportunity for rent supplement - that they offer mortgage interest relief instead. If this is the case, what does this amount to in comparison with the current interest relief that i'm getting? (mortgage is currently 122k over 29 years).

Also, if i am currently availing of the rent a room scheme (letting to 3 people - but under the 10k maximum allowed per year), how would this effect any application for social welfare support?

As said, this is last resort stuff - but just want to know theres enough of a safety net there so that I don't lose my house!

 

[Welfarite]

Mortgage interest supplement is there to provide short-term income support to eligible people who are unable to meet their mortgage interest repayments in respect of their place of residence. The supplement assists with the interest portion of the mortgage repayments only. See here for more info.

Jobseeker's Benefit will not be affected by any income you have from the rent-a-room scheme as it is not a means tested payment.

 

[bogota400]

Thanks for that welfarite. Has anyone here availed of this (probably not so many....yet!)? If mortgage repayment at the moment is approx. 620/month (year 2 of 30) - how do I determine what percentage of this is interest and what is capital repayment?

I wonder what they classify as 'short term'?

 

[gipimann]

When applying for Mortgage Interest Supplement, you need to get a form completed by your bank/building society - it will tell you how much of your repayment is capital + interest. It's usual for most of the repayments in the early years to be mostly capital.

A rough guide is the capital balance outstanding x current interest rate = annual interest amount due.

Bear in mind that the rental income you receive from the rent-a-room scheme, while not impacting on Jobseeker's Benefit, may impact on Mortgage Interest Supplement entitlement because it is a means-tested scheme and all income received is assessable.

There is no fixed rule on what "short-term" means, but there is provision in legislation to require you to make alternative arrangements after approx 12 months on Mortgage Interest Supplement - this could mean asking the house-owner to sell up and find cheaper accommodation. Rarely if ever implemented for obvious reasons, by the way!