Will paying off my mortgage affect my benefits?

MissVelvetena

My mortgage term comes to an end at the end of June & I am on ESA & have applied for PIP. If I pay off my mortgage with Equity Release, will it affect my benefits, please? I don't want the DWP getting their knickers in a twist, had enough trouble with them this last three months!! Thanks.

CockneyRebel

Hi MissVelvetena and welcome

Can you clarify please
Your morgage term ends in june, does this leave you with a capital balance to pay off ?
Before contemplating any equity release you should get trained financial advice

PIP is not means tested so will not be affected
Is your ESA contribution based or income related ?

CR

MissVelvetena

Yes, its an Interest only Mortgage, so the capitol is to pay off. My ESA is income based. Getting a phone call tomorrow from Step Change Financial Solutions.

CockneyRebel

If you are only releasing sufficient equity to pay off the capital I don't think there will be a problem
If your are releasing some for other purposes then up to £6000 should also not affect your ESA

CR

MissVelvetena

Oh lovely, many thanks. Was thinking of releasing enough to pay off the capitol & about £3,000 for some urgent house repairs.

CockneyRebel

Please do keep all records of what you do with the money as large sums do raise questions
I cannot see that using the equity in your home to repay the capital borrowed, which you have no choice about, can come under deprivation of capital and likewise any amount under £6000 does not affect ESA (IR ) and monies used for essential repairs should also be discounted
But I don't trust these buggers

CR