The little-known scheme can help eligible homeowners struggling with their mortgage repayments
Support for Mortgage Interest (SMI) is a scheme that helps people on low incomes who are struggling to meet their monthly mortgage repayments. The exact amount you can get will depend on how much of your mortgage you still have to pay and the current SMI interest rate.
The scheme can cover interest on up to £200,000 of your mortgage. However, if you’re on Pension Credit or started claiming another qualifying benefit before January 2009 and you were below state pension age at the time you can only get up to £100,000.
The current SMI interest rate stands at 3.66%. As such, if you qualify for the £200,000 figure, you would receive £610 per month or £7,320 per year to help cover the interest of your mortgage, according to government data.
The money is usually paid directly to your lender, and you can request to stop the payments at any time by contacting the office that handles your benefits. When the payments start will depend on the benefits you claim.
To be eligible for SMI, you must have a mortgage or home improvement loan for the property you live in and must be claiming a qualifying benefit. This can include income support, jobseeker’s allowance, employment and support allowance, universal credit and pension credit, reports the Express.
For anyone claiming the support through pension credit, the payments should kick in from the date you start receiving this benefit. However, if you’re applying via Universal Credit, you’ll receive SMI after getting this payment three months in a row.
There is no credit checks for SMI loans and more eligibility information can be found the Gov.uk website.
SMI can only be used to help cover interest payments on the mortgage for the home you live in or loans you’ve taken out for repairs and improvements to your home. You cannot use the support to pay missed mortgage payments or any insurance policies you may have.
It’s important to highlight that this support is a loan and will need to be repaid with interest. This will usually be paid when you sell or transfer ownership of your home. You can also make voluntary repayments if you wish.
You’ll need to fill out and sign a form in order to apply. Your lender must then complete it and send it to the government office that pays your benefit.
Before you start the process, you’ll need to find out how much mortgage or home improvement loans you have left to pay. As well as how much interest you’re paying on your mortgage or home improvement loans and get your partner to agree to sign the form if applicable.
If you do qualify for SMI, you’ll be offered a loan but you can still choose to turn this down. The offer will remain available for as long as you meet the SMI eligibility criteria.
SMI payments can also be backdated up to when you were first entitled to the loan. You can also apply using the relevant contact for the benefits you receive, such as the Pension Service, Universal Credit account or Jobcentre Plus.