Support for Mortgage Interest (SMI) – Support if your situation changes through illness or unemployment.

About this opportunity

(taken from Support for Mortgage Interest (SMI): What you’ll get – GOV.UK)

Support for Mortgage Interest (SMI) usually helps pay the interest on up to £200,000 of your loan or mortgage. SMI is paid as a loan. You’ll need to repay the money you get with interest when you sell or transfer ownership of your home (unless you’re moving the loan to another property). If you want to pay the loan back more quickly, you can also make voluntary repayments. Find out more about how you repay your SMI loan.

Eligibility:

To be eligible for a Support for Mortgage Interest (SMI) loan, you must have a mortgage or home improvement loan for the property you live in. Contact the office that pays your benefit to find out if you could get an SMI loan. You must also be getting one of the following qualifying benefits:

Universal Credit – Payments can start if you’ve got Universal Credit for 3 months in a row. If you move to Universal Credit within a month of another benefit ending, payments can start when you’ve spent 3 months in total getting that previous benefit and Universal Credit. or call the helpline on 0800 328 5644

Pension Credit: Overview – GOV.UK– Payments can start from the date you start getting Pension Credit. or call the helpline on 0800 731 0469.

However, you can only get up to £100,000 if you’re getting Pension Credit or you started claiming another qualifying benefit before January 2009 and you were below State Pension age at that time

SMI is normally paid direct to your lender.

You can ask to stop getting SMI at any time by contacting the office that pays your benefit.

Check if someone else needs to agree to the loan

If you live with your partner, they’ll need to agree to the loan as well – even if they don’t own the home with you. This is because the DWP treat you as a couple for benefits.

If you own the home with someone else like a friend or family member, they might need to agree to the loan if they live with you. They won’t need to agree if they live somewhere else.

The DWP will tell you if someone else needs to agree to the loan. It’s usually a good idea for them to agree, because it means you’re more likely to afford the mortgage interest payments.

How to apply

If you then want to apply for SMI, you’ll need to fill in and sign in a form. You do not need to pay a fee to apply.

Before filling in the form, you’ll need to:

  • find out how much mortgage or home improvement loans you have left to pay
  • find out how much interest you’re paying on your mortgage or home improvement loans
  • get your partner to agree to sign the form, if you have a partner

You’ll then need to send the form to your lender for them to complete. Your lender will send the completed form to the office that pays your benefit. If you qualify for SMI, you’ll be offered a loan. You can choose to accept it or turn it down.

Repaying your loan

You’ll need to repay your SMI loan as a lump sum with interest if you sell or transfer ownership of your home.

The interest you pay can go up or down, but the rate will not change more than twice a year. The current rate is 4.5%. You’ll be told if this is going to change.

Interest will be added every year until the loan is completely repaid or written off.

If you die before you’ve paid off your SMI loan, it will not need to be repaid if your home is left to a surviving partner. The loan will need to be repaid if your home is left to anyone else or it’s sold.

If you finish paying your mortgage, you will not need to repay your SMI loan unless you sell or transfer ownership of your home.

If you turn down the offer at first, you can still accept it at any time as long as you’re eligible for SMI. The payments to your lender can be backdated up to when you were first entitled to the loan. Contact the office that pays your benefit.

You will not be asked to sell your home in order to repay your SMI loan.

Also visit: Apply for SMI – Citizens Advice

About gov.uk

Please note, whilst we do our best to keep information as up-to-date as possible, over time community services may change some details such as dates, times, and locations. The information we share is therefore subject to change. Our goal is to showcase available support services within the city. However, inclusion in this database does not constitute an endorsement or recommendation of any organisation. Click here to read our full disclaimer.

If you find any errors, please let us know by emailing Community@southamptonvs.org.uk  so we can amend the incorrect information.

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