Support For Mortgage Interest (SMI) is a benefit available to owner-occupiers to help with housing costs such as mortgage interest and other home loans or repair bills. However from April 2018 it is being abolished and replaced with a loan system that will affect current and new claimants. The new system will mean loans have to be repaid once the recipient can afford to repay the money, for example when they restart work or they sell their property.
If you own your own home and also claim one of these benefits then you could be eligible to claim…
- Income Support
- Jobseeker’s Allowance (income-based)
- Employment and Support Allowance (income-related)
- Pension Credit
- Universal Credit
Those who rent their property don’t qualify for SMI but instead should see if they qualify for Housing Benefit.
How much will I get?
The calculation on whether you qualify for SMI is complex. For example, the interest rate used in the calculation is not the one issued from your mortgage provider, instead it’s a standard rate of 3.12%. This could cause an issue if find that your mortgage interest rate is higher and the support you are given leaves a shortfall on what you are obliged to repay each month.
You may also encounter an issue if your mortgage costs increased since you started claiming one of the means tested benefits that you need to be in receipt of in order to claim SMI.
There are also what are known as upper loan limits, which creates a ceiling on the amount of SMI you can claim, depending on which qualifying benefit (s) you claim.
Mortgage Interest run-on
This is a payment paid once you enter full time work to help bridge the income gap between stopping certain benefits and getting paid from your employer. Mortgage Interest run-on is automatically paid as part of income support, so there is no need to apply separately.
How do I apply?
SMI eligibility will be decided when you apply for the benefits which support it.
You will need to provide documentary evidence of your housing costs when making an application. If you are making a claim for the benefits which support SMI you will not usually be able to make a claim relating to housing costs for the first 39 weeks.
When will I get paid the money?
The money itself is paid directly to the institution which issued your mortgage or home loan. Remember, you can only get help with the interest borrowed not the repayment amount.
Impact on other benefits
SMI counts as income when calculating eligibility for other means tested benefits.