If you claim certain benefits, support for mortgage interest (SMI) payments can help you with mortgage interest and interest payments on loans 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.
SMI can only be claimed if you claim certain other benefits. The qualifying benefits are:
- income support
- income-based jobseeker's allowance
- income-related employment and support allowance
- pension credit
Some homeowners get help with the cost of their mortgage payments when they claim universal credit.
Claim for help with interest on other loans
You may also be able to get help to pay 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
Loans for essential repairs or improvements may be covered even if you take them out after you claim a qualifying benefit.
You won't get help to pay off the loans themselves.
Waiting times for payments
People who receive pension credit are entitled to help immediately but there are waiting periods for everyone else.
You won't get any SMI payments for the first 13 or 39 weeks after you claimed help with your housing costs if you are on:
- income support
- income based jobseeker's allowance
- income related employment and support allowance
The 13-week waiting period applies if you make your claim before 1 April 2016.
The 39-week waiting period applies if you make your claim on or after 1 April 2016.
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 you receive income support, pension credit or income-related employment and support allowance.
Get advice about mortgage arrears if you are unable to make your full mortgage payments.
Interest rates used to calculate SMI payments
SMI is currently paid at 3.12% (the level of the Bank of England's published Average Mortgage Rate). Check Gov.uk for any changes in this rate.
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 could find yourself in mortgage arrears.
How much of a mortgage is covered by SMI
You can usually claim help with interest payments on loans up to:
- £200,000 if you're of working age
- £100,000 if you receive 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're told that deductions are being made. It may be possible to show that it's not reasonable to expect you to move somewhere smaller or cheaper.
If you're separated and it's 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 might affect the amount of benefit you're 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 must 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. Housing benefit only covers rent payments.
However, if you bought your home through a shared ownership scheme, you can get housing benefit to help pay the rent on the share you do not own.
Get help and advice
Contact our local Shelter advice centre or Citizens Advice if you need help with your claim. 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.