Support for Mortgage Interest (SMI)
What is SMI?
If you are a homeowner you may be eligible for help towards interest payments on your mortgage or loans you’ve taken out for certain repairs and improvements to your home. SMI is a paid loan, which you’ll need to pay back with interest when you sell or transfer ownership of your home. In order to qualify, you normally need to be in receipt (or treated as being in receipt) of a qualifying benefit. However there is no guarantee that you’ll get SMI for a mortgage or loan you take out.
SMI will not help with:
- the amount you borrowed (only the interest on your mortgage)
- anything towards your insurance policies
- Mortgage arrears/missed payments
Help you will get if you qualify
If you meet the eligibility criteria for SMI, you will receive help paying the interest on up to £200,000 of your loan or mortgage. This figure is £100,000 if; you’re getting Pension Credit or you started claiming another qualifying benefit before January 2009. If you’re already in receipt of SMI and move to Pension Credit within 12 weeks of stopping your other benefits, you will still be entitled to help with interest on up to £200,000. The interest rate used to calculate the amount of SMI you’ll get is currently 2.61%.
How is SMI paid back?
SMI is a loan that is repaid with interest when you sell or transfer ownership of your home. The interest added to the loan (currently 1.5%) can go up or down, but the rate will not change more than twice per year.You can repay the loan more quickly, by making voluntary repayments. The minimum voluntary repayment is £100 or the outstanding balance if it’s less than £100.
You will not be asked or made to sell your home in order to repay your SMI loan. If you sell your home and there is not enough money from the sale of your home to repay the loan in full, the rest of the loan will be written off and you will not have to repay it.
The eligibility criteria for SMI, is usually being in receipt of one of the following qualifying benefits:
- Income Support
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Universal Credit
- Pension Credit
If you apply for one of the qualifying benefits but cannot get it because your income is too high, you may still get SMI. You’ll then be treated as getting the benefit you applied for. However, you will not be treated as getting Universal Credit if you cannot get it because your income is too high.
How SMI is paid
SMI is usually paid direct to your lender. The payments will commence from either; the date you start getting Pension Credit, or, after you’ve had 9 consecutive Universal Credit payments, or after you’ve claimed any other qualifying benefit for 39 consecutive weeks.
How to apply
When you apply for one of the qualifying benefits, you will have to answer questions about your housing costs to establish if you’re eligible for SMI. You might also be sent a form requesting more detailed information. If you qualify for SMI, you’ll be offered a loan.
Already in receipt of a qualifying benefit?
If you are already in receipt of a qualifying benefit, you should contact the office that pays your benefit to find out if you could get an SMI loan. Please refer to the contacts section at the end of this page.
How to repay
Contact DWP Loan Repayment and request a ‘settlement letter’ - this will tell you how much you need to pay. You can pay by telephone or online banking using the bank account details in your settlement letter.
DWP Loan Repayment
T: 0800 916 0567 NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 916 0567 - Monday to Friday, 8am to 6pm
Get other financial help with your housing costs
You will still be eligible for financial help with your housing costs if your Income Support, income-based Jobseeker’s Allowance or income-related Employment and Support Allowance is going to stop because you are about to; return to work full-time, work more hours, earn more money. Please refer to our Mortgage Interest run on page for details.
If you get or have applied for Income Support, income-based JSA or income-related ESA contact Jobcentre Plus.
T: 0800 169 0310 - Textphone: 0800 169 0314 -NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 169 0310 - Welsh language: 0800 328 1744
If you get or have applied for Pension Credit contact the Pension Service.
T: 0800 731 0469 - Textphone: 0800 731 0464 - NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 731 0469 - Welsh language: 0800 731 0453 - Welsh language textphone: 0800 731 0456 - Monday to Friday, 8am to 6pm (except public holidays)
If you get or have applied for Universal Credit contact the Universal Credit helpline.
Universal Credit helpline
T: 0800 328 5644 -NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 328 5644 - Welsh language: 0800 012 1888 -Textphone: 0800 328 1344 - Monday to Friday, 8am to 6pm