Support for mortgage interest
What is a Support for Mortgage Interest (SMI) Loan?
If you are an owner occupier or in a shared ownership scheme, entitlement to certain benefits may mean you qualify for a loan from DWP to help with the interest payments on a mortgage and/or other loan secured on the property you live in. This is called a Support for Mortgage Interest (SMI) Loan.
Prior to 5 April 2018 SMI was a benefit that did not need to be paid back, but it has now become a loan which means any SMI Loan payments you receive must be repaid with interest but not until you sell or transfer ownership of your home.
You may qualify for a SMI Loan if you and/or your partner:
- have a mortgage and/or loan secured on your property, or make alternative finance payments for the home you live in; and
- receive the guarantee element of Pension Credit; or
- have been receiving Income Support, Jobseeker's Allowance or Employment and Support Allowance continuously for 39 weeks (exceptions apply); or
- have been receiving Universal Credit for 9 consecutive months
For Universal Credit claimants to qualify for a SMI Loan they must also have no earned income at all.
How much will my SMI Loan payments be?
SMI Loan payments can help towards the balance outstanding on the mortgage and/or other loans secured on your property (up to a limit).
For working age people the limit is £200,000. Any mortgage or loan specifically used for adaptations to your property will not count towards the £200,000 as long as these adaptations are to meet the needs of a disabled person in the benefit unit (household). For pension age people the upper limit is usually £100,000 but there are exceptions.
A standard interest rate is then used to work out the amount you may get. This is currently 2.09% (it was 2.61% between April 2018 and April 2021). For example, if your mortgage balance is £100,000 the maximum SMI Loan payment you could receive would be £100,000 x 2.09% = £2,090 per year or £40.20 per week.
If you have some income coming in or another adult living with you who is not your partner (a non-dependant), this may then be taken into account to reduce the maximum SMI Loan payment you qualify for. The rules are complex but the benefits calculator will work out how much SMI Loan you may qualify for and display this alongside your benefit entitlements.
What do I do next?
Support for Mortgage Interest Loan rules are complex and as they are interest bearing and repayable we recommend you get help from an adviser before deciding whether to sign up for one. More information is also available on help with housing costs.