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Getting help to make your mortgage interest payments

If you are a homeowner and get certain income-related benefits, you may qualify for help towards mortgage interest payments. This is payable as part of your benefit and is called Support for Mortgage Interest (SMI). Find out if you are eligible, how to claim SMI.

SMI – what it is and who can get it

You may get help with mortgage interest payments as part of your benefits if you are a homeowner and are getting:

  • Income Support
  • income-based Jobseeker’s Allowance
  • income-related Employment and Support Allowance
  • Pension Credit

You will only get help towards mortgage interest payments for a mortgage or loan to buy or improve your home. SMI is normally paid directly to your lender. There’s no guarantee that you will get SMI for a loan you take out.

SMI - what’s not included

SMI cannot help you pay:

  • the amount you borrowed (only the interest on the mortgage is paid)
  • anything towards insurance policies you have
  • mortgage arrears

How SMI is calculated

The standard interest rate used to calculate SMI is currently 3.63 per cent.

From 1 October 2010 the standard interest rate is set at a level equal to the Bank of England’s published monthly average mortgage interest rate. The starting rate that will apply from 1 October 2010 is 3.63 per cent (the rate published by the Bank of England on 31 August 2010).

SMI – excess payments

Some homeowners may have actual interest rates that are lower than the standard rate used to calculate SMI payments. This means they receive more SMI than required to meet the payments due to their lender. These payments can only be credited to their mortgage account.

Claiming benefit and getting your questions answered

Contact your local Social Security /Jobs & Benefits office, Employment and Support Allowance centre or The Pension Service to:

Changes to SMI

Changes to SMI rules have applied from 5 January 2009.

Different rules applied to SMI up to 5 January 2009. If you got help to make mortgage interest payments before this date, you will continue to get the same level of help.

Rules that apply to SMI since 5 January 2009

From 5 January 2009 if you were getting income-based Jobseekers Allowance, Income Support or income-related Employment and Support Allowance, most claims for SMI came under new rules including:

  • waiting 13 weeks from the date you claim before you get SMI (this is known as a waiting period and was previously 39 or 26 weeks)
  • being able to claim for mortgage interest on up to £200,000 of your mortgage (this was previously £100,000)
  • getting paid SMI for up to two years only if you are getting income-based Jobseeker’s Allowance

There is no limit to how long you can get SMI if you are getting:

Two year time limit to SMI

A two year time limit to SMI for new customers getting income-based Jobseeker's Allowance was introduced from 5 January 2009.

This affects some people from 5 January 2011. If you have received SMI for two years from 5 January 2009 or later, you will no longer receive help with your mortgage interest. This will apply if you have been getting SMI continually or through linked benefit claims.

It is important that you talk to your lender about this change. Lenders are required to treat people fairly, and must consider what they can do to prevent borrowers losing their homes.

If you can't meet your mortgage repayments, or you are worried you might fall behind, you must contact your lender as soon as possible. You can also get independent advice from other organisations. Further information about mortgage arrears or payment difficulties can be found using the following link.

You can also get mortgage payment advice from the National Homelessness Advice Service (NHAS).

If you claim Pension Credit - conditions that apply to SMI

If you claim Pension Credit, and you want help towards mortgage interest payments, you will:

  • have no waiting period before you receive help with mortgage interest payments
  • be able to claim for mortgage interest on up to £100,000 of your mortgage

If you have questions about SMI contact the Pension Service

Moving to Pension Credit from other benefits

If you are already getting SMI under the rules that apply from 5 January 2009, you can continue to get help with your mortgage interest on up to £200,000 of your mortgage, if you move on to Pension Credit within 12 weeks of ending a claim for:

  • Income Support
  • income-based Jobseeker’s Allowance
  • income-related Employment and Support Allowance

You can continue getting the same amount of help with your mortgage interest, if you remain entitled to Pension Credit.

Mortgage Interest Run On

You may get an extra four weeks money towards paying 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 start work of 16 hours or more per week
  • your partner starts work of 24 hours or more per week
  • your/your partner’s hours of current work increase to 16 or 24 per week respectively

This is called the Mortgage Interest Run On.

Find out if you qualify for the Mortgage Interest Run On.

More useful links