Support for Mortgage Interest

If you're a homeowner and get certain income-related benefits, you may be able to get help towards mortgage interest payments. This is called Support for Mortgage Interest (SMI). SMI is a loan, which you’ll need to repay with interest when you sell or transfer ownership of your property.

About Support for Mortgage Interest (SMI)

SMI is sometimes known as ‘help with housing costs'. It can help towards mortgage interest payments:

for a mortgage
for a loan to buy
to improve your home

It cannot help you pay:

the amount you borrowed (only the interest on the mortgage is paid)
insurance policies
mortgage arrears

SMI is normally paid directly to your lender. There’s no guarantee you will get SMI for a loan you take out.

Important information to know before applying for an SMI loan

If you decide a Support for Mortgage Interest loan is the best option for you, there are a number of things you need to know before you apply.

An SMI loan is different to a normal loan because you don’t get a lump sum. Instead, regular payments will be made towards the interest on your mortgage and some home improvement loans. You will need to pay these back.

The total amount you owe will go up with every payment that is made. For example, if the Department for Communities make 12 payments of £50, you would owe £600 (plus interest).

Key elements of an SMI loan:

there are no fees to set up the Support for Mortgage Interest loan
there will be no credit check
interest will be added to the total amount you owe the Department for Communities until it is paid back or written off
where applicable, the Department will place a charge (or in some cases a mortgage) over your property to secure the loan - this means that when you sell your property or ownership is transferred, you must pay the Department back from any remaining equity once your mortgage is repaid
where the Department is unable to secure the loan by a charge (or in some cases a mortgage) it will still offer the loan and may secure it as a Statutory Charge on the property at a later date
you’ll get a statement every year telling you how much Support for Mortgage Interest loan you have borrowed, and how much interest has been added
you can ask to stop getting Support for Mortgage Interest loan payments at any time
if your Universal Credit changes or ends, your Support for Mortgage Interest loan payments may stop

Eligibility

You may be eligible for SMI if you are a homeowner and get one of the following benefits:

Income Support
income-based Jobseeker’s Allowance
income-related Employment and Support Allowance (ESA)
Universal Credit
Pension Credit

You can get a loan:

from the date you start getting Pension Credit
after you have claimed any other qualifying benefit for 39 consecutive weeks
after you have been getting Universal Credit for three consecutive months - you should note that any earned income you get when you are on Universal Credit will affect the date when you can start to get Support for Mortgage interest payments

You might still be able to get SMI if you apply for one of the qualifying benefits but can’t get it because your income is too high. In this case you will be treated as getting the benefit you applied for.

You stopped getting SMI because your qualifying benefit stopped

You’ll start getting SMI again straight away if:

you stopped getting Universal Credit but you started getting it again within six months
you stopped getting Pension Credit and you were moved to Universal Credit
you stopped getting Income Support, income-based JSA or income-based ESA, and you applied for Universal Credit within a month
you get Income Support, income-based JSA or income-related ESA and you apply for Universal Credit within three months of receiving a Migration Notice letter

If none of these apply, you’ll have to wait the normal period before getting SMI again.

What you’ll get

If you are eligible, you’ll get help paying the interest on up to £200,000 of your loan or mortgage. This figure is £100,000 if:

you get Pension Credit
you started claiming another qualifying benefit before January 2009

If you already get SMI and move to Pension Credit within 12 weeks of stopping your other benefits, you’ll still get help with interest on up to £200,000.

The Standard Interest Rate (SIR) used to calculate how much SMI you will get is currently 3.66 per cent. If you have a lower interest rate than this, you will receive more SMI than is needed to meet your payments. These payments can only be credited to your mortgage account.

Before you apply for an SMI loan

Before you apply for a SMI loan you should find out:

how much mortgage you have left to pay
how much mortgage interest you pay

and

other ways you can pay your mortgage interest

This information will help you decide how to continue paying the interest on your mortgage and/or home improvement loans.

Your annual statement from your mortgage lender tells you how much mortgage interest you pay.

If you have a joint mortgage, you must talk to the other person named on the mortgage about the options for paying the mortgage interest.

You can’t get a Support for Mortgage Interest loan unless the correct loan documents are signed by both of you. It may be useful to talk through your options together.

It’s your responsibility to make sure you pay your mortgage interest. If you don’t your home may be at risk.

More information is available on Support for Mortgage Interest

How to apply for an SMI loan

If you are receiving a benefit other than Universal Credit, you can apply by downloading and completing the following claim form:

Help with housing costs form MI12

To check if you can get an SMI loan and for queries, contact your local Jobs and Benefits office, Employment and Support Allowance Centre or the Northern Ireland Pension Centre.

Free advice is also available from:

If you claim Universal Credit, you can use your online account to state that you would like to apply for SMI when you make a claim, or at any time during your claim.

You can find out more information on repaying your mortgage interest on a low income

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