The government has asked the industry to informally feed back its views on SMI to the Department for Work and Pensions (DWP) after a call for informal evidence on its long-term future in December.
The deadline for views will be 27 February.
Borrowers are eligible for Support for Mortgage Interest if they are on income support, jobseeker’s allowance and pension credit can claim payments to cover their mortgage interest at a flat rate of 3.63%, with all payments paid direct to the lender.
In its News and Views newsletter, the CML said in the case of overpayments, any extra money should be credited to the borrower’s account, instead of the lender’s.
The trade body advised the government the £200,000 qualifying level and the 13-week waiting period for entitlement to benefit should be maintained. The CML warned payments should continue to go directly to lenders, instead of benefit claimants to avoid further missed payments.
A two-year limit on payments of SMI may be appropriate for benefit claimants of working age, said the CML, and to help recover costs of paying SMI to elderly or long-term disabled claimants it accepts the principal of placing a second-charge on the property.
