Support for Mortgage Interest
Support for Mortgage Interest (SMI) is a benefit that helps to pay towards the interest on a mortgage or other eligible home improvement loans. On 5 April 2018, SMI benefit will end and from 6 April, SMI loans will be introduced.
What is SMI?
Support for Mortgage Interest (SMI) is also known as Help with Housing Costs. SMI pays towards the interest on a mortgage or other eligible home improvement loans.
On 5 April 2018, SMI benefit will end and from 6 April, SMI loans will be introduced. This means that from 6 April 2018, if you claim SMI you'll need to make sure that you pay interest on your mortgage or home improvement loans, either yourself or using the loan. The loan is voluntary and you have the choice to accept it or not.
How much could I get?
You'll get help paying interest on up to £200,000 of your loan or mortgage (or up to £100,000 if you receive Pension Credit). Interest is calculated at a rate of 2.61%.
In most cases, the SMI is made directly to your lender.
When the benefit changes to a loan, the level of financial support you receive will not change. But it does mean that you'll eventually pay back what you've borrowed if you have enough equity in your property. This happens when the property has been sold, the property's ownership is transferred, or when someone dies and their property forms part of their estate.
Am I eligible to claim SMI?
You may be eligible for SMI if you receive one of the following benefits:
- Pension Credit
- Income Support
- income-related Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Universal Credit (UC).
You must also be liable to pay interest on your mortgage or have an eligible home improvement loan.
How do I claim SMI?
How will I be contacted about the changes?
If you currently claim SMI benefit, you'll be contacted in advance of your SMI benefit ending on 5 April 2018.
You'll get a letter and information booklet, as well as a call from Serco who are the company working on behalf of the Department for Work and Pensions.
You'll then have time to decide how you want to pay the interest on your mortgage and any home improvement loans from 6 April 2018 onwards.
The SMI loan does not replace SMI benefit automatically. You will need to complete and return a loan agreement document first.
What to do next?
For more information call Age Cymru Advice on 08000 223 444