Support for mortgage interest (SMI) is a loan from the Department of Work and Pensions (DWP) to help pay towards the interest on your mortgage or another home loan.
You might get SMI if you own your home or you’re in a shared ownership scheme.
You need to be getting one of these benefits:
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Income Support
- Universal Credit
- Pension Credit
Check if you can get SMI for your loan
SMI can help to pay the interest payments for a:- mortgage for the home you live in
- loan to help you buy more of your home
- loan to help with other costs like legal fees and stamp duty
- loan to pay off your mortgage
- alternative finance arrangement like an Islamic mortgage – if you get Universal Credit or Pension Credit
When your SMI payments will start
If you get JSA, ESA or Income Support, you can usually get SMI starting from 39 weeks (about 9 months) after you claimed JSA, ESA or Income Support. If you get Universal Credit, you can usually get SMI starting from 3 months after you claimed Universal Credit. The time before your SMI starts is called the ‘waiting period’. If you’ll struggle to pay your mortgage until your SMI starts, check what help you can get with your other living costs or contact us if you can get an SMI loan earlier. If you get Pension Credit, your SMI payments will start straight away.Check if you need to get advice
There are some situations where you should get advice first – check if you need advice before you apply for SMI.If you’ve missed mortgage payments
You can still apply for SMI, but it won’t help you pay back the payments you’ve missed.
It’s important to plan how you’ll pay back the missed payments – contact us to help you work out how to afford them.
If you’re having problems with other debts
You might not get an SMI loan if you think you could either:
- go bankrupt
- make another agreement to help pay your debts, like an individual voluntary arrangement (IVA)
If you’ve already gone bankrupt or made a formal debt agreement
If your bankruptcy or other agreement has ended, you can apply for SMI straight away – you don’t need to check with anyone. If you’re still bankrupt or have an IVA, ask your trustee in bankruptcy or insolvency practitioner if you can apply for SMI. They’ll usually tell you not to apply, because it affects how much money you’d get if you had to sell your home to pay your debts. If you have another agreement like a debt management plan or administration order, call the office you usually talk to about your benefits. Ask them if you can get SMI – you can ask an adviser to help you.If you own your home with someone who isn’t part of your benefit claim
SMI might affect what happens to your home when one of you dies – this is because it could split your mortgage into a share for each owner.
Your mortgage payments won’t change. But if one of you dies, the other owner might have to sell the home to:
- give a share to someone who inherits it (like a relative)
- pay off debts for the person who’s died
If you want to buy a new home while you’re getting benefits
If you get Universal Credit, you can get SMI for a mortgage for a new home.
If you or someone in your family gets JSA, ESA, Income Support or Pension Credit, you can get SMI for a new mortgage if you:
- need to move home so a boy and girl can have separate bedrooms – if they’re at least 10 years old
- need to move to a home that’s more suitable for a disability
- already have a mortgage for the home you’re moving out of – you can’t get more SMI than you could get for your old mortgage
- are getting Housing Benefit when you buy your new home – you can’t get more SMI than the amount of Housing Benefit you’re getting
- only get JSA, ESA or Income Support to help with housing costs – you can’t get more SMI than the amount of JSA, ESA or Income Support you’re getting
Compare SMI with other options
You’ll need to decide whether you want to accept an SMI loan or find another way to pay your mortgage. It’s important to make sure you keep making the payments so you don’t lose your home. Compare the different ways you could pay the mortgage, like getting a loan from somewhere else or changing your mortgage payments. For each option, find out:- how much money you’ll get
- how much interest you’ll pay
- when you’ll have to pay it back
- if it will affect your benefits or credit score
How much SMI you can get
If you get JSA, ESA, Income Support or Universal Credit, the DWP will usually pay the interest on up to £200,000 of your mortgage. If you get Pension Credit, the DWP will usually pay the interest on up to £100,000 of your mortgage. They’ll pay interest on up to £200,000 if your Pension Credit started within 12 weeks after you stopped getting JSA, ESA, Income Support or Universal Credit. If you own the home with someone else, you might only get interest for your share of the mortgage. For example, if you have a mortgage of £200,000 with your ex-partner, the DWP might say your share of the mortgage is half the total amount – £100,000. Once the DWP have worked out how much of your mortgage they can pay the interest on, they’ll pay it straight to your mortgage lender. You can check how much interest the DWP pays on GOV.UK. The DWP might take some money off your payments if you get money from:- work
- a mortgage protection policy
- something else, like a lodger
How much interest you’ll pay
You can check how much interest you’ll pay on the SMI loan on GOV.UK. The rate can go up or down. Even though you’ll pay interest, it could be cheaper than other ways of borrowing money. For example, you might pay more interest if you get a loan from somewhere else like a bank or credit union – or if you change your mortgage payments. If a friend or family member gets a loan for you, they might pay more interest on their loan too. You can find out more about comparing how much loans will cost before you decide what to do.When you’ll have to pay it back
If you get a loan from somewhere else, you’ll usually need to pay it back sooner than an SMI loan. You’ll usually only have to pay back the SMI loan when you sell your home or give it to someone else. The DWP will take the money for the loan after your mortgage has been paid. You can’t use the money for anything else until your mortgage and SMI loan have been paid. You might need to pay the SMI loan back earlier if you go bankrupt or make another formal agreement to pay other debts you have – like an individual voluntary arrangement (IVA). If your partner lives in your home and will inherit it when you die, they won’t have to pay the loan back straight away – it can be paid after they die. If anyone else inherits your home, they’ll have to pay back the SMI loan first. If there isn’t enough money left to pay the SMI loan back after your mortgage has been paid, the DWP will cancel the rest of the debt. They’ll only ask for more money if:- they think you deliberately sold your home cheaply
- you gave your home to someone else instead of selling it
How it will affect your benefits or credit score
There’s no credit check for the SMI loan, and it won’t affect your benefits or credit score. If you get a loan from somewhere else like a bank or a family member, it might affect your benefits if they give you all the money in one payment. This could happen if your savings after you get the loan are more than:- £6,000 – if you get JSA, ESA, Income Support or Universal Credit
- £10,000 – if you get Pension Credit