Support for Mortgage Interest

Support for Mortgage Interest (SMI) is a loan that helps to pay towards the interest on a mortgage or other eligible home improvements. SMI ended as a benefit from 6 April 2018 and has been replaced with a loan. 

What is Support for Mortgage Interest?

Support for Mortgage Interest (SMI) is also known as Help with Housing Costs. SMI is a loan to help with the interest on your mortgage payments or home improvement loans.

You'll eventually pay back what you've borrowed if you have enough equity in your property. This happens when the property is sold, the property's ownership is transferred, or when someone dies and their property forms part of their estate.

If you already claim SMI, from 6 April 2018 you'll need to make sure that you pay interest on your mortgage or home improvement loans, either yourself or using the loan. The loan is voluntary and you have the choice to accept it or not.

How much could I get?

You'll get help paying interest on up to £200,000 of your loan or mortgage (or up to £100,000 if you receive Pension Credit). Interest is calculated at a rate of 1.7%.

In most cases, the SMI payment is made directly to your lender.

Am I eligible to claim Support for Mortgage Interest?

You may be eligible for SMI if you receive one of the following benefits:

• Pension Credit
• Income Support
• income-related Jobseeker’s Allowance (JSA)
• income-related Employment and Support Allowance (ESA)
• Universal Credit (UC).

You must also be liable to pay interest on your mortgage or have an eligible home improvement loan.

How do I claim Support for Mortgage Interest?

• If you receive Income Support, income-based Jobseeker's Allowance (JSA) or income-related Employment and Support Allowance (ESA), contact Jobcentre Plus.
• If you receive Pension Credit, contact the Pension Service. 
• If you receive Universal Credit, contact the Universal Credit helpline.

How will I be informed about the changes to Support for Mortgage Interest?

If you were claiming SMI as a benefit before 5 April 2018, you should have been contacted in advance of your SMI benefit ending.

Receiving a letter

You should have received a letter explaining the changes, and letting you know that a company called Serco, working on behalf of the Department for Work and Pensions (DWP), will be in touch over the phone.

Having a phone call

You can book a call with Serco, or if not they will contact you within 3 weeks of receiving the letter. If you live with your partner, you'll both need to be there for the phone call.

Serco will discuss whether you want to accept the loan, or whether there are other ways to pay your mortgage interest if you don't accept the loan.You don't need to make a decision over the phone - take your time to think through your options and seek advice if needed.

If you don't accept the loan

Think about other ways that you can pay back the interest on your mortgage. The letter you receive from DWP will outline your options, which include using other savings or investments to repay your mortgage, moving to a smaller property or seeking help from friends or family.

If you accept the loan

Serco will send you a loan agreement document, which you'll need to complete and return. If you live with your partner, you'll both need to sign the agreement.

If you jointly own a property with someone who isn't your partner, you should seek advice before signing the loan agreement.

What to do next?

For more advice, contact:

• Citizens Advice
• Money Advice Service