If you claim certain benefits, support for mortgage interest (SMI) payments may help you with your mortgage interest and interest payments on loans taken out for improvements or repairs.
Support for mortgage interest (SMI)
Support for mortgage interest (SMI) helps home-owners with the costs of mortgage payments and some loans for repairs and improvements to the home when claiming certain other benefits. The qualifying benefits are:
- income support
- income-based jobseeker's allowance
- income-related employment and support allowance
- pension credit
Claim for help with interest on other loans
You may also be able to get payments towards the interest on loans taken out for:
- essential repairs or improvements to your home (for example for insulation, repairing dangerous faults or adapting your home if someone in your household is ill or disabled)
- buying your ex-partner's share in your home if you have separated
You won't get help to pay off the loans themselves. Loans for essential repairs or improvements may be covered even if you take them out after you claim a qualifying benefit.
Waiting times for SMI help reduced until 31 March 2016
People over the age of 60 who are claiming pension credit are entitled to help immediately but there are waiting periods for everyone else.
Payments normally start 13 weeks after you started claiming if you are eligible for support for mortgage interest because you are claiming:
- income support
- income based jobseeker's allowance
- income related employment and support allowance
The 13 week waiting period is a special measure and applies until 31 March 2016. (The previous waiting period was 39 weeks).
SMI payments with jobseeker's allowance limited to two years
If you receive jobseeker's allowance (JSA) and you claimed after 5 January 2009, you are only able to claim support for mortgage interest for up to two years. There is no time limit if you claimed before that date or receive income support, pension credit or income-related employment and support allowance.
It is important that you seek advice about mortgage arrears if you are unable to make your full mortgage payments.
Use Shelter's directory to find advice services in your area.
Interest rates used to calculate SMI payments
SMI is paid at the level of the Bank of England's published Average Mortgage Rate (currently 3.13%). It is only be adjusted in future when the published average mortgage rate differs by 0.5% or more.
The rate of interest you actually pay on your mortgage is not taken into account. If you pay a lower interest rate than the average mortgage rate, you may be able to repay some of the capital you owe. If the mortgage rate you pay is higher, you may find yourself in mortgage arrears.
How much of a mortgage is covered by SMI
It may be possible to claim help with interest payments on loans up to £200,000 (this applies until 31 March 2015) or £100,000 if you are receiving pension credit.
If you claimed SMI as part of another benefit in the 12 weeks before you claimed pension credit, you may still be able to claim help on loans up to £200,000.
Support for mortgage interest is not intended to repay the capital you originally borrowed or pay towards any investment linked to your mortgage (such as an endowment policy, pension or ISA).
Reduced payments for large or costly homes
Any payments you receive may be reduced if your home is considered to be more expensive or larger than you need.
Get advice from a welfare benefits adviser if you are told that deductions are being made. It may be possible to show that it is not reasonable to expect you to move somewhere smaller or cheaper.
If you are separated and it is possible for you to receive some help with mortgage payments from your ex-partner or spouse, talk to an adviser to check how these payments should be made. They may affect the amount of benefit you are entitled to.
How to claim support for mortgage interest (SMI)
When you apply for income support, income based jobseeker's allowance or pension credit, you must include information about your mortgage and housing costs to get the extra payments. You have to provide proof of your income, details of your financial situation and any related paperwork. Your lender has to complete some of the forms confirming the details of your loan.
Contact Jobcentre Plus or the Pension Service for a form if you already receive these benefits but are not getting any extra payments towards your housing costs.
How support for mortgage interest (SMI) is paid
Payments are usually made at the end of every four weeks along with your other benefits.
Mortgage payments are usually due on a monthly basis, so you may appear to be behind with your payments.
Housing benefit and support for mortgage interest (SMI)
You can't claim housing benefit to pay your mortgage as h ousing benefit only covers rent payments.
However, if you bought your home through a shared ownership scheme, you may be able to get housing benefit to help pay the rent on the share you do not own.
Get help and advice
If you need help with your claim your local Shelter advice centre or Citizens Advice may be able to help. Many of our local services have advisers specialising in welfare benefits issues as well as housing.
Use Shelter's directory to find services in your area.