Policy background Loans for mortgage interest etc
The Act enables interest-bearing loans to be made to eligible owner-occupiers in respect of their liability to make owner-occupier payments in respect of their home, in particular mortgage interest payments. Those entitled to receive income support, income-based jobseeker’s allowance, income-related employment and support allowance, state pension credit or universal credit will be eligible to receive a loan.
	The Act replaces the existing legislative scheme that allows owner-occupiers who are receiving an income-related benefit to claim additional help towards their mortgage payments. This help is replaced by the opportunity to apply for a loan which will only be granted if individuals satisfy certain requirements, including that they have received financial advice. The Act enables the Secretary of State to secure a charge on the individual’s property as security for the loan. The Act also makes provision about the transition from the current provision of support for mortgage interest to the new loans scheme, and allows the Government to manage the introduction of the new scheme in an appropriate way.
	The provision of help with mortgage interest in the form of a loan rather than a benefit will ensure that the Government continues to mitigate the risk of repossession while providing better value for the tax payer.