SMI BENEFIT: Homeowners on qualifying income-related benefits can get Support for Mortgage Interest relief on some home improvements or repairs.
Use this guide to check if Support for Mortgage Interest payments scheme will help cover interest payments on selected house improvements.
Find out what you could get but you must be a homeowner to be eligible. You must also be claiming qualifying income related benefits.
You could get financial help with mortgage interest or any loans taken out for certain reparations to your domestic property.
Support for Mortgage Interest (SMI) gets paid as part of your benefit. As a rule SMI goes directly to your lender.
Note: SMI does not help towards the amount you borrowed. It only covers the interest portion. Do not use SMI as a guarantee of payment for a loan you take out.
Amounts for Mortgage Interest Support
Those who qualify for Support for Mortgage Interest get help paying interest on their loan or mortgage for sums up to £200,000. The uppermost figure is £100,000 if you get Pension Credit or you started claiming for 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 may still get the aid on interest on up to £200,000.
Note: stopped getting paid as a ‘welfare benefit’ since the 5th of April 2018. Those who are receiving it will get a letter with information on an SMI loan and other options available.
Support for Mortgage Interest Waiting Period
Support for Mortgage Interest payments usually go direct to your lender after the waiting period. The waiting period is 39 weeks after you first claim the qualifying benefit. But there is no waiting period for those getting Pension Credit.
Note: The standard interest rate used for SMI calculations is 2.09%./p>
What is not included in Support for Mortgage Interest
Support for Mortgage Interest cannot help you pay for:
- Amounts that you borrow (only the interest on your mortgage).
- Anything towards any insurance policies that you may have.
- Mortgage arrears or missed mortgage payments.
SMI Time Limits
You will only get help for 2 years if you get income-based Jobseeker’s Allowance and apply for the first time. The same rule applies if you started getting SMI after the 5th of January 2009.
Paying Back Support for Mortgage Interest Loan
In fact, SMI is now paid out as a loan. So, you would need to repay the money with interest. As a rule, it would be due at the time you sell or transfer the ownership of your home.
The interest added to the loan fluctuates (it can go up or it can go down). Even so, the rate will not change more than twice in one year. The current interest rate for an SMI repayment is 0.3%.
You can make voluntary repayments to pay the loan back quicker. The minimum voluntary repayment would be £100 or the full outstanding amount if the balance is less than the £100.
Ask DWP Loan Repayment for a ‘settlement letter’. It will state how much you need to pay back. You can make a payment by telephone or through online banking. Use the bank account details in the settlement letter.
As a rule, SMI would get paid direct to the lender. The payments can start from either:
- The date you start receiving Pension Credit.
- After getting nine (9) consecutive Universal Credit payments.
- After you have claimed any other qualifying benefit for 39 consecutive weeks.
Support for Mortgage Interest Eligibility
Support for Mortgage Interest eligibility depends on whether you get one of these benefits:
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Pension Credit
- Universal Credit
Note: They would not treat you as getting Universal Credit if the reason you cannot get it is due to your income being too high.
How to Claim Mortgage Interest Benefit
There are several offices you can contact to check if you meet the eligibility criteria of SMI benefits. You should contact the office related to the support you are already benefiting from to claim Support for Mortgage Interest:
Extra Information about SMI Rules
A change in circumstances may mean that your benefit is going to stop. In most cases you can still get financial help even if you are planning to:
- Make a full-time return to work.
- Start working more hours.
- Secure a position to earn more money.
Note: If it happens, the kind of financial help you can get is better known as ‘Mortgage Interest Run On‘ benefit.