The UK is still amidst a cost-of-living crisis and low-income homeowners are looking for ways to get by, and with interest rates and house prices increasing, they are struggling to keep up with mortgage payments.

Fortunately, the government have introduced a new scheme to help called the Support for Mortgage Interest Loan.

What is the ‘Support for Mortgage Interest Loan’

The Support for Mortgage Interest Loan (SMI) is a new scheme that allows homeowners that are claiming certain benefits to get assistance with paying their mortgage, or any loans taken out for home repairs or improvements.

Up to £200,000 can be covered by the SMI to help with these payments, unless the claimer is receiving pension credit, or they started claiming another qualifying benefit before January 2009 and were below State Pension age at that time, in which case the max amount is £100,000. The interest rate used to calculate how much can be loaned under the SMI is currently 2.09% as of April 2022, though this is subject to change.

How does it work?

The SMI only covers the interest on loans, meaning it does not cover the money borrowed, and cannot be taken advantage of for paying towards insurance or missed mortgage payments.

Homeowners needn’t worry about having to struggle to make their SMI repayments, as it only has to be paid back (with interest) after the claimer pays off their mortgage, sells their home or transfers ownership of their home, with the current interest rate on repayments being 0.8%. This rate doesn’t change more than twice a year, but it is important that claimants check the rate every few months to stay on top of their repayments.

SMI payments are automatically paid directly to lenders. Alternatively, claimants can make voluntary repayments to pay back the loan quicker. Voluntary repayments, however, must be paid back in minimum payments of at least £100, unless the remaining amount owed is less than £100.

Who is eligible?

There are requirements that must be met in order for someone to claim this loan. The claimer must be claiming one of the following benefits:

  • Income support (must have claimed for at least 39 weeks)
  • Job-Seeker’s Allowance (must have claimed for at least 39 weeks)
  • Employment and Support Allowance (must have claimed for at least 39 weeks)
  • Universal Credit (must have claimed for at least 9 months in a row and must not be receiving other types of income)
  • Pension Credit

Homeowners can check their eligibility by calling the office that pays their benefit.

How to apply

An eligible individual can claim SMI by contacting the office that pays their benefits.

Those claiming Income Support, income-based JSA or income-related ESA, can contact Jobcentre Plus:

Telephone: 0800 169 0310

Textphone: 0800 169 0314

Those claiming Pension Credit can contact the Pension Service.

Telephone: 0800 731 0469

Textphone: 0800 731 0464

Those on Universal Credit can contact the Universal Credit Helpline.

Telephone: 0800 328 5644

More contact information is available on the page for applying for SMI.