What is Support for Mortgage Interest (SMI)?
If you are a homeowner and get certain income-related benefits, you may qualify for help towards your mortgage interest payments.
Who qualifies for SMI?
You qualify if you are a homeowner and are getting:
- Income Support
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Pension Credit
You only get help towards interest payments for mortgages and some loans for repair and improvements to your home, any payments are made directly to your lender. There is no payment of the capital sum borrowed or any related insurance premiums.
How is SMI calculated?
The standard interest used to calculate SMI is currently 3.63% which is equivalent to the Bank of England's published Average Mortgage Rate. The rate of interest you actually pay on your mortgage is not taken into account, if you currently pay a lower rate then you may be able to repay some capital. Conversely if your actual rate is higher then you may find yourself with mortgage arrears.
How much of the mortgage is covered under SMI?
You may be able to claim interest on loans up to £200,000 (£100,00 if you are receiving pension credit). If your home is considered to be more expensive or larger than you need payments may be reduced. However, it may be possible to show that it is not reasonable to expect you to move to somewhere smaller or cheaper.
Is there a waiting period before you can claim SMI?
People over 60 who are claiming Pension Credit are entitled to help immediately. For all others qualifying the payments start 13 weeks after you started claiming any of the benefits listed above.
For how long can you claim SMI?
For those claiming Jobseeker's Allowance (after 5/5/09) support will only be paid for up to two years. There is no time limit if you are receiving Income Support, Pension Credit, or Income-related Employment and Support Allowance.
How do you claim for SMI?
You can make a claim for SMI at your local Jobcentre Plus or via the Pension Service. You have to provide details of your mortgage costs together with details regarding your financial situation. Your lender will have to complete some forms confirming the details of your loan. Payments will be made every four weeks direct to your lender.
Where can I obtain further help?