Getting help with your mortgage interest payments :Cross Stitch – Money, tax and benefits
If you are a homeowner and get certain income-related benefits, you may qualify for help towards your mortgage interest payments. This is payable as part of your benefit and is called Support for Mortgage Interest (SMI). Find out if you qualify and how to claim SMI.
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 is no guarantee that you will get SMI for a loan you take out.
SMI cannot help you pay:
- the amount you borrowed (only interest on the mortgage is paid)
- anything towards insurance policies you have
- mortgage arrears
The standard interest rate used to calculate SMI is currently 3.63 per cent.
From 1 October 2023 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 applies from 1 October 2023 is 3.63 per cent (the rate published by the Bank of England on 31 August 2023).
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.
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 2024
From 5 January 2024 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:
- Income Support
- income-related Employment and Support Allowance
- Pension Credit
A two year time limit to SMI for new claimants 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 2024 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.
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.
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.
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 are about to:
- return to work
- work more hours
- earn more money
This is called the Mortgage Interest Run On.
Find out if you qualify for the Mortgage Interest Run On by using the link below.