Support for Mortgage Interest (SMI) benefit

Hi Gordon, yes you're correct in thinking this rate is only as an example, at 3%
The SMI loan is set to follow the Standard Variable Interest Rate. Currently set at 0.25% This is projected to raise x2 this year.
DWP Paper work states that when the Standard Interest Rate increases either during the year or per annum the Interest on the loan will reflect this.
If the Interest rate doesn't change within the year, the yearly 'Anniversary date' will reflect any change in the Standard Interest Rate, at the time of the yearly anniversary on the balance remaining on the Mortgage.
Basically the loan will follow the Standard Interest Rate, as it would with any Mortgage not on a tailored account.
As the Mortgage owed to the Mortgage Provider reduces each year, the Standard Interest Rate will be applied on the remaining balance, whatever that is at the yearly 'anniversary' date.
Therefore if the Standard Interest Rate was to be above the 3% stated in the example, this would reflect in the payment owed on the SMI loan.
At the sale of the property the amount accrued on the SMI Loan will come out of whatever the property is sold for.
For example if the SMI loan was taken out and the home wasn't sold for, lets say, for another 20yrs.
Anyone hoping to leave the property to family as part of their estate, can only do so if the property is to be sold and the SMI loan repaid in full.
I know some people like to gift the property to family. If there is an SMI loan on the property they cannot do this, unless the SMI loan is paid back in full. Going back to the example of 20yrs I stated, the loan could be as much as £30,000 off the sale of the home.
Where this leaves people who need to sell their property, to go into a nursing home, to pay nursing home fees I don't know.... thats a whole new chapter!!

Hope this makes sense.

Best wishes
ms-indestructable

Hi still not received my paperwork from DWP.

Gordon as ever thank you I contacted them and they are sending them out. I have another question and wondered if you could advise. I need to let the DWP know that an ad hoc payment from my pension will be coming to me for less than £6000. I am so nervous contacting them and always think something sinister is going to happen. Can you please advise the best way forward. Do I just contact and say this is happening or do I have to send letters etc. Do they just rely on people contacting them.

Kind regards Spitfire

Thank you Gordon, I took the plunge and called them and they agreed that I had no savings but could I just send through evidence of the payment from Aegon Pensions when it is paid into my account. They said I could use internet banking statement rather than going to the bank as there may be a charge and because of my condition I would prefer it this way. Should I still send it even though I am under the £6000. Kind regards Spitfire