Support for Mortgage Interest: Waiting Period and Limits

If you are a homeowner on a low income and struggling to keep up with your mortgage, Support for Mortgage Interest (SMI) can pay some of the interest for you. It is not a benefit. It is a loan secured on your home, and it has to be repaid with interest when you sell, transfer ownership, or die¹.

SMI only pays the interest on your mortgage. It generally cannot be used to pay off the amount you borrowed, which is the capital². It is usually paid directly to your lender³. The waiting period depends on which benefit you get: Pension Credit claimants can get SMI immediately, while Universal Credit claimants wait three months⁴.

The amount of mortgage interest that can be covered is capped. For most people the limit is £200,000, but for Pension Credit claimants and those who started claiming another qualifying benefit before January 2009, the limit is £100,000³. The loan is secured by a charge over your property, and interest continues to build up until it is repaid³.

SMI is a loan secured on your home, not a benefit

Support for Mortgage Interest is a government loan scheme that helps with the interest costs of mortgages and certain home loans⁴. It is offered as a repayable loan, and the loan is secured against your property⁷. Where the loan needs to be secured, the Department for Work and Pensions will place a charge, or in some cases a mortgage, over your property³.

This matters because it changes what happens when you sell. You will need to repay the loan as a lump sum with interest if you sell or transfer ownership of your home⁸. If you finish paying your mortgage, you will not need to repay your SMI loan unless you sell or transfer ownership³.

SMI can help towards mortgage interest payments for a mortgage, a loan to buy your home, or a loan to improve your home³. You may also be able to get payments towards the interest on loans you took out for essential repairs or improvements, or buying your ex-partner's share in your home if you have separated². It cannot be used to pay mortgage arrears⁹.

Who can get SMI: the qualifying benefits

You may be eligible for SMI if you are a homeowner and get one of the qualifying income-related benefits³. These are Universal Credit, Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance, and Pension Credit¹.

If you are a joint or sole owner and are claiming Income Support, income-based Jobseeker's Allowance, or Pension Credit, you may qualify⁷. You might still be able to get SMI if you apply for one of the qualifying benefits but cannot get it because your income is too high, and you will be treated as getting the benefit you applied for³.

There are exclusions. You cannot get Support for Mortgage Interest if you also receive Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay, earnings from employment or self-employment, or a tax refund¹⁰. This means that if you are working or receiving statutory pay, SMI will usually not be available.

Waiting period: from Pension Credit start to 3 months on Universal Credit

The waiting period for SMI depends on which benefit you receive. Pension Credit claimants can get SMI immediately, from the date you start getting Pension Credit⁴. For Universal Credit claimants, the wait is longer.

You will get help after you have been getting Universal Credit for three consecutive months³. This is described as receiving Universal Credit continuously for three assessment periods, which is three months¹¹. One source notes that you may have to wait up to 9 months before payments can be made if you receive Universal Credit, which reflects the time it can take for the claim to be processed and for payments to start⁷.

If you stopped getting income-related ESA and applied for Universal Credit within a month, SMI restarts straight away³. This is a specific rule for people moving between benefits.

Limits: interest on up to £200,000, or £100,000 in some cases

The amount of mortgage interest that SMI will cover is capped. If you are eligible, you will get help paying the interest on up to £200,000 of your loan or mortgage³. This is the standard limit for most claimants⁹.

There is a lower limit for some people. The figure is £100,000 if you get Pension Credit, or if you started claiming another qualifying benefit before January 2009³. This means that Pension Credit claimants have a lower cap on the mortgage interest that can be covered¹⁶.

The maximum mortgage amount is given as £200,000 by one independent guidance source and £100,000 by another, and this conflict is not ruled on⁹. The official guidance is clear that the £100,000 limit applies to Pension Credit claimants and those who started claiming another qualifying benefit before January 2009³.

How to apply and how payments reach your lender

Support for Mortgage Interest is usually paid directly to your lender³. This means the money does not come to you and then go to the mortgage company; it goes straight to the lender to reduce the interest you owe.

The scheme has been in its current form since April 2018, when help with mortgage interest changed to a loan rather than a benefit¹⁷. If you are a homeowner and getting certain benefits, you could get help towards interest payments on your mortgage¹⁸. Homeowners on certain benefits may be able to get help towards mortgage interest payments called Support for Mortgage Interest¹⁷.

You may be able to get a Support for Mortgage Interest loan to help pay towards the interest on your mortgage repayments, and towards interest repayments on repairs or improvements you have made to your home¹⁹. If you claim Income Support, Pension Credit, income-related Employment and Support Allowance, or income-based Jobseeker's Allowance, you may be eligible²⁰.

To apply, you will need to contact the Department for Work and Pensions. The loan is administered through the DWP, and payments are made directly to your lender³. If you are in Northern Ireland, the scheme is administered by the Northern Ireland Housing Executive, and there is separate guidance on repaying your mortgage interest on a low income³.

Paying the loan back: sale, transfer or death

You will need to pay this money back, with interest, when you sell or transfer ownership of your property²¹. The loan would need to be repaid with interest when you sell your home or transfer ownership²². You must pay the loan back when you sell your home or transfer it to someone else²³.

You will be asked to repay the loan if you sell your home, if the title for your property is transferred, assigned or otherwise disposed of, or if you die²⁴. SMI loans are repayable with interest when the property is sold, ownership is transferred, when the claimant dies, or on a voluntary basis⁴.

If you finish paying your mortgage, you will not need to repay your SMI loan unless you sell or transfer ownership of your home³. This means that if you pay off your mortgage but stay in your home, the SMI loan remains outstanding but does not need to be repaid at that point.

Interest continues to be charged at a daily rate if you stop receiving the loan or choose to stop it⁵. This means that even if you stop getting SMI, the interest on the loan you have already received will continue to build up until it is repaid.

When a claimant moves to a new property, they can transfer their SMI loan to the new property without repaying; the outstanding balance is transferred to the new property²⁵. You may be able to move Support for Mortgage Interest to another property by contacting the DWP loan management team¹⁰.

Where to get help

If you are struggling with your mortgage, there are free and impartial sources of help. MoneyHelper provides guidance on benefits and tax credits you can claim as a carer, and on help with mortgage payments²⁶. Shelter England has advice on what to do if you are worried about your mortgage²⁷. National Debtline has a guide on help with your mortgage payments²⁴. Turn2us has information on how and when to pay back the Support for Mortgage Interest loan²⁸.

For homeowners in Northern Ireland, nidirect has guidance on mortgage arrears or payment difficulties¹⁷. In Scotland, the cost of living campaign website has information on rent and mortgage support¹⁸. Shelter Cymru has advice on mortgage interest payments².

If you are a carer, Carers UK has information on Carer's Allowance and other benefits²⁹. Gingerbread has information on cost of living help for single parents³⁰. Maternity Action has advice on money for parents and babies²².