Key Post How to calculate Mortgage Interest Supplement:

Bronte

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Loss of employment, how much will the state pay towards mortgage?

This question is for someone else. If one is paying an interest only mortgage of 890 a month and loses one's job circa how much will the state pay on this amount towards the mortgage. It's a 210K mortgage and will revert to capital and interest in about 6 months which will then cost about 1200 a month.
 

Eve1

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Re: Loss of employment, how much will the state pay towards mortgage?

I don't know much info but just so you have a positive reply

if you are entitled to job seekers allowance you may be able to claim mortgage relief on the interest (don't know what it is called). Its like rent supplement but pays towards the interest amount of your mortgage. They will not repay capital. You should ring your local community welfare officer.
 

Bronte

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Re: Loss of employment, how much will the state pay towards mortgage?

Thanks welfarite, that's the one but it doesn't tell me how much. Does it mean this: if one has no job, receives a state payment (single parent plus 2 kids) no assets, no money and has an ordinary house that one is currently able to pay mortgage payments for, one would receive the following "will generally ensure that your income after paying the interest on your mortgage does not fall below than a minimum level. This level is the Supplementary Welfare Allowance minus €13. "

As this is rather vague does it mean all the interest of €890 on the original mortgage (less €13). I'm assuming a mortgage of 210K is considered an ordinary mortgage amount currently. There must be a cap on the interest but I cannot find it on the website. I note they don't pay the capital, how on earth are people on the dole managing to pay the capital, do they renegotiate the loan over a longer term?

Shaking - the state would pay because it is cheaper than rehousing someone or paying their rent for them. It's to help people who fall on hard times.
 

gipimann

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Re: Loss of employment, how much will the state pay towards mortgage?

There is no specific limit or cap on Mortgage Interest Supplement payments, however there are some criteria which are taken into account (see the Rules listed on the page which Welfarite linked to). In some areas the "reasonable interest" level is compared with the maximum rent limit which applies.

By way of example, here is how it's calculated. Assume that the interest supplement is being granted on the figure you mentioned (€890 per month), the only income is Jobseeker's Benefit or Assistance, and there are no savings or other property.

JB / JA is the same as the basic Supplementary Welfare Allowance rate, so there is no excess income. *

Weekly Interest = 890 x 12/52 = 205.38
Minimum Contribution = 18 (2009 rate)

Mortgage Interest Supplement entitlement = 205.38 - 18 = 187.38 per week.

It is usually paid calendar monthly and would equate to €812

* If a person was receiving a SW payment which was greater than the SWA rate, the difference between the two rates would also be subtracted from the weekly interest, so the supplement paid would be less.
 

Rigoletto

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73
Re: Loss of employment, how much will the state pay towards mortgage?

Shaking - the state would pay because it is cheaper than rehousing someone or paying their rent for them. It's to help people who fall on hard times.

really? €812 a month is not an inconsiderable amount of money. what is the maximum rent limit.

so the mortage when it reverts to full capital repayment will be less than €478 per month? so for a 210K mortgage this person will pay €119 a week.
how long does this go on for, how many weeks will the state pay this?
 

Cashstrapped

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275
Re: Loss of employment, how much will the state pay towards mortgage?

There is no specific limit or cap on Mortgage Interest Supplement payments, however there are some criteria which are taken into account (see the Rules listed on the page which Welfarite linked to). In some areas the "reasonable interest" level is compared with the maximum rent limit which applies.

By way of example, here is how it's calculated. Assume that the interest supplement is being granted on the figure you mentioned (€890 per month), the only income is Jobseeker's Benefit or Assistance, and there are no savings or other property.

JB / JA is the same as the basic Supplementary Welfare Allowance rate, so there is no excess income. *

Weekly Interest = 890 x 12/52 = 205.38
Minimum Contribution = 18 (2009 rate)

Mortgage Interest Supplement entitlement = 205.38 - 18 = 187.38 per week.

It is usually paid calendar monthly and would equate to €812

* If a person was receiving a SW payment which was greater than the SWA rate, the difference between the two rates would also be subtracted from the weekly interest, so the supplement paid would be less.

Have to say that is one of the best examples I have seen on how Mortgage Interest Supplement Works, even after sitting down with Community Welfare Officer I could not follow it. One thing to note is that any maintenance you receive up to circa €95 per week is also seen as means (OP mentioned she was a Single Parent), this could reduce the amount that would be paid towards your interest by the Welfare Officer considerably.
 

gipimann

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Re: Loss of employment, how much will the state pay towards mortgage?

what is the maximum rent limit....how long does this go on for, how many weeks will the state pay this?

The maximum rent limits vary from county to county, and by family size. I've posted a link to them on another thread, will find it and edit this post.

The SW Regulations on Mortgage Supplement do not set out a specific duration for payment of the supplement. In theory it will continue as long as the family circumstances remain the same and the person continues to have an entitlement. Obviously for a repayment mortgage (interest and capital), the entitlement to the supplement will decrease as the amount of interest being paid decreases.

Thanks, Cashstrapped, I chose a very straightforward example - there are so many bits and pieces which can affect entitlement (e.g. Maintenance as you mentioned) that I'd need a degree in maths to work through it!

Edit: Link to the post which in turn links to the maximum rent limits
 
Last edited:

Bronte

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14,162
Re: Loss of employment, how much will the state pay towards mortgage?

really? €812 a month is not an inconsiderable amount of money. what is the maximum rent limit.

so the mortage when it reverts to full capital repayment will be less than €478 per month? so for a 210K mortgage this person will pay €119 a week.
how long does this go on for, how many weeks will the state pay this?

You're forgetting that someone who will get this won't have much money in the first place, so it's not as easy as saying only x per month. A single person with two kids on state benefits would have a big problem to pay 119 a week (I've not checked your figures) in fact it would be nearly impossible.

Gipimann thanks for the calculations that's what I was looking for and I did go all over the social welfare site to try and figure it out but as you know the social welfare rules are endless.....

I appreciate anyone's advice as this is for a relation of mine not in a happy place right now as is the case for a lot of people.
 

nesbitt

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185
Re: Loss of employment, how much will the state pay towards mortgage?

Gippiman very kindly responded to my post in Sept 08 as follows:

From the numbers you've given here's how entitlement to Mortgage Interest Supplement has been calculated.

Weekly interest is calculated as (445.54 x 12 / 52) = 102.81

Income in excess of SWA rate for family (maintenance) = 92 per week.
Minimum contribution from customer = 13 per week*

(*this is in SWA legislation, all persons in receipt of rent supplement or Mortgage Interest Supplement must make a min. contribution of 13 euro per week).

Entitlement is weekly interest - (means + min contribution) - 102.81 - 105 = zero entitlement.

As stated any means greatly reduces entitlement....
 

gipimann

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4,922
Re: Loss of employment, how much will the state pay towards mortgage?

Thanks Nesbitt,
Just to say that the minimum contribution has increased from 5/1/2009 - it is now €18 per week.

I gave another example of a calculation earlier in the thread, using the 2009 amounts.
 

gipimann

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4,922
The general formula for calculating mortgage interest supplement is as follows:

1. Calculate total weekly income - this can be SW payments, part-time earnings, assessed savings or other property.

2. Subtract the SWA rate for the family size from the total weekly income. This is the income in excess. As a guide, SWA rates and full-rate JA/JB rates of payment are the same (€204.30 for a single person)

3. Calculate the weekly interest on the mortgage.

4. Entitlement is calculated as - weekly interest on mortgage minus income in excess minus minimum contribution (€24).

If the amount reached at no 4 is positive, then that's the entitlement, if it's negative, there is no entitlement.

There may be other factors which affect entitlement - if the interest is considered very high, then entitlement (if any) may be based on a lower amount rather than the full interest paid, or if there's a non-dependant adult child residing, they are expected to contribute towards the mortgage as well.
 

senni

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175
is there any chance you could do that calculation as im confused.

Brother receiving 417 per week for him, his wife and 3 kids..no other income
mortgage interest weekly is 120 ( lucky he has a tracker )

Does he qualify ?
 

gipimann

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4,922
senni,

If there are no savings, investments or other sources of income, it would appear that your brother may qualify. The SWA rate is the same as Jobseeker's (417 pw), so he would just be required to pay the minimum contribution of €24 per week, and if the interest is €120 then the supplement would be calculated as 120 - 24 = 96 euro per week.

Your brother should apply at the CWO office in his local health centre, where a detailed calculation will be carried out.
 

leesider29

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120
I presume I would be correct in saying that because I am on an interest only mortgage I would not receive any help with my mortgage??
 

gipimann

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4,922
No, being on an interest-only mortgage doesn't disqualify you from applying for Mortgage Interest Supplement.

You can apply and entitlement will be assessed according to current criteria which can be found on the welfare website (www.welfare.ie) - follow the link for Supplementary Welfare Allowance and from there to Mortgage Interest Supplement.
 
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