IMLA says cut in SMI will add to borrowers' woes
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The Intermediary Mortgage Len-ders Association has criticised the timing of the government’s cut to the Support for Mortgage Interest scheme.
SMI payments used to be calculated at 1.58% above the Bank of England base rate and were capped at 6.08%. They will now be calculated at 1.58% above the Bank’s average mortgage rate, currently 3.6%.
Peter Williams, executive director of IMLA, says this reduction in support will hit some households’ ability to repay their mortgage.
He says: “We are not out of the woods yet in terms of arrears, and this will put pressure on households and lenders as the ability to service debt will be harmed.”
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