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What the state provides: Mortgage interest support

Saturday 27 January 1996 19:02 EST
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What the state provides

Mortgage interest support is available only if you qualify for income support benefit. That excludes about 70 per cent of the UK population, who either have a partner working or assets of more than pounds 8,000.

Until 1 October last year, when benefits were cut, mortgage holders who did qualify would have had half their mortgage interest payments met by the state for the first 16 weeks of unemployment, and the full interest payments met from that point onwards, for so long as they were unable to work.

Under the revised system, new borrowers get nothing for the first nine months of unemployment, and their whole mortgage interest payments are met after that. Borrowers who took out their loan before 1 October now get nothing for the first two months, half their interest payments for the next four months, and then the full rate. Only interest on the first pounds 100,000 of a mortgage is covered.

Note that the state covers only the interest portion of your monthly payments - it does nothing to pay off the capital.

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