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Support for Mortgage Interest (SMI)

A guide for RCN members on Support for Mortgage Interest (SMI). SMI is a payment by the Department of Work and Pensions (DWP) to assist those on limited incomes with the interest portion of their mortgage.

Eligibility

If you are a homeowner in receipt of certain income related benefits you might be eligible to claim assistance towards interest payments on your mortgage or loans you’ve taken out for certain repairs and improvements to your home.

To qualify for SMI you must also receive one of the following:

  • income related Employment and Support allowance (ESA)
  • Income Support
  • income based Jobseeker’s allowance (JSA)
  • Pension credit
  • Universal credit
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How to apply

You can apply for SMI at the same time as you apply for the above benefits. Please contact:

*If you receive JSA and made your claim after 2009, you can only receive SMI for up to 2 years.

If approved SMI is usually paid directly to your lender. The following waiting periods also apply:

  • no waiting period if you receive Pension Credit
  • 9 month waiting period if you receive Universal Credit
  • 39 week waiting period if you receive ESA, Income Support or JSA.

Please let your lender know if you are applying for SMI, they may agree to add any arrears to the amount of your mortgage. If you have a repayment mortgage, you may consider asking your lender to switch you to interest-only payments for the period you are in receipt of SMI.

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What you'll get

If approved SMI is usually paid directly to your lender. It only covers the interest on up to £200,000 of your loan or mortgage (£100,000 if you receive Pension Credit) and not the original capital.

There is a maximum interest rate that SMI will meet, further information is available at Gov.uk.

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Changes to your circumstances

Always let your mortgage lender know of a change in circumstance and drop in income before arrears build up. If approached at an early stage, many lenders can be flexible and consider options such as offering a repayment holiday, extending the length of your mortgage or switching to interest-only payments.

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Further information

For more in depth discussion of your options as a homeowner when facing a drop in income, contact us. We have services that can assist you to maximise your income, manage a reduced household budget, deal with any unmanaged debt and, our welfare advisers can support you if you need help to challenge a decision about your entitlement to benefit.

Gov.uk

Shelter

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Need more advice?

Call RCN Direct on: 0345 772 6100