The Universal Credit Regulations 2013

Amount in respect of interest on loans

10.—(1) This paragraph provides for the calculation of the amount to be included in the owner-occupier’s housing costs element under this Schedule in respect of relevant payments which are loan interest payments.

(2) Subject to sub-paragraphs (3) to (5), the amount in respect of the loan or loans to which the payments relate is to be calculated as follows.

• Step 1

  Determine the amount of the capital for the time being owing in connection with each loan.

• Step 2

  If there is more than one loan, add together the amounts determined in step 1.

• Step 3

  Identify which is the lower of these two amounts—

  (a)

  the amount resulting from step 1 or 2 (as the case may be); and

  (b)

  £200,000,

  and, if both amounts are the same, that is the identified amount.

• Step 4

  Apply the formula—

  

  where—

  “A” is the amount identified in step 3, and

  “SR” is the standard rate that applies at the date of the calculation (see paragraph 12).

  The result is the amount to be included under this Schedule in respect of loan interest payments.

(3) In the application of sub-paragraph (2) to a loan (or any part of a loan) which was taken out for the purpose of making necessary adaptations to the accommodation to meet the disablement needs of a person specified in paragraph 5(3) of Schedule 3—

(a) the loan (or the part of the loan) is to be disregarded for the purposes of steps 2 and 3; and

(b) “A” in step 4 is to be read as the amount resulting from step 1 in respect of the loan (or the sum of those amounts if there is more than one loan taken out for the purpose of making such adaptations) plus the amount (if any) resulting from step 3 in relation to any other loan or loans.

(4) Any variation in the amount of capital for the time being owing in connection with a loan is not to be taken into account after the relevant date until such time as the Secretary of State recalculates the amount under this Schedule by reference to the amount of capital owing in connection with the loan—

(a) on the first anniversary of the relevant date; or

(b) in respect of any variation after the first anniversary, on the next anniversary which follows the date of the variation.

(5) “Relevant date”, in relation to an owner-occupier, means the date on which an amount of housing costs element calculated under this Schedule is first included in the owner-occupier’s award.