In the emergency Budget, the Chancellor of the Exchequer announced that from this autumn, ISMI will be paid at 3.67%, the Bank of England’s average mortgage rate. The current mortgage interest rate is 6.08%, held since December 2008.
The CML predicted that the changes will take place in October, It estimated that over three-quarters of people currently receiving ISMI payments are not in mortgage arrears yet.
The trade body added that the government should continue its current level of support by maintaining access to ISMI and making quick decisions on the future of mortgage rescue schemes.
The CML said: “Given the budget restrictions facing the government, now is the time for some long-term decisions on the government’s role to promote sustainable home-ownership and help provide a safety net for borrowers in difficulty.
“An early commitment to maintaining government support for ISMI and mortgage rescue would re-assure current – and future – homeowners and lenders alike.”
