With the cost of living still on the rise, millions of people up and down the country are finding it increasingly difficult to afford essential payments, including their mortgage. However, if you're on certain benefits, you may be able to get help paying the interest part of the loan. This article will explore Support for Mortgage Interest (SMI) in more detail.
What is Support for Mortgage Interest (SMI)?
Support for Mortgage Interest (SMI) is a loan designed to help individuals on certain benefits cover the interest payments on their mortgage or other eligible home improvement loans. It is sometimes known as 'help with housing costs' and was first introduced by the UK government in 1948, but has undergone several changes since, including being converted from a grant to a loan in April 2018.
SMI cannot be used to help you with the original amount borrowed on your mortgage (called the principal); it can only help with the interest that accrued on this amount. It also can't be used to help you pay insurance policies or mortgage arrears.
Unlike other loans, you don't have to make monthly payments towards an SMI. However, you will eventually need to pay it back with interest when you sell your home, transfer ownership of your home if there is enough equity in the property, or if it forms part of your estate after your death. In most cases, the loan is paid from the Department for Work and Pensions (DWP) directly to your lender.
It's also important to note that an SMI loan will charge compound interest, which means that each month's interest is added to the total borrowed amount when the next month's interest is calculated. This can add up quicker than expected, leaving you with less equity than expected.
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Check my eligibilityAm I eligible for SMI?
The main eligibility criterion for an SMI loan is that you receive one of the following benefits:
- Pension Credit
- Universal Credit
- Income Support
- Income-related Jobseeker's Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
As well as claiming any of the above benefits, you must also be liable to pay interest on your mortgage and have an eligible home improvement loan.
It's important to note that, if you live with your partner, they'll also need to agree to the loan - even if the mortgage or loan isn't in their name. This is because the DWP assesses couples for benefits if they live in the same property.
To find out if you're eligible for an SMI loan, contact the office that pays your benefits. This information can be found on any of the letters you've received about your benefits or on your online benefits portal.
How much could I get with an SMI loan?
Working out how much support you could get with an SMI loan can be complicated, and there is usually an upper limit on the amount that can be claimed.
For Universal Credit, the maximum amount you can claim on loans secured on your property is usually £200,000. For Pension Credit, it is capped at £100,000.
The interest rate is based on the Standard Interest Rate (SIR), which is periodically set by the government. As of June 2026, it is 3.66%.
As an example, if the remaining balance on your mortgage is £250,000 and you're eligible for an SMI loan of £200,000, your loan will cover £7,320 a year or £610 a month.
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How to apply for an SMI loan
To apply for SMI, you must fill out and sign a claim form. There is no fee required to submit an application.
If you claim Universal Credit, you'll need to apply for SMI through your online portal on the Universal Credit website. If you claim other benefits, such as Pension Credit, you'll need to contact the provider that sends your payments.
You'll need to provide certain details in your application, including information about your mortgage, the remaining balance, and the interest rate you're currently paying. If you live with your partner, they will also need to agree to the loan, as their signature will be required.
You may need to wait a few months for your first SMI payment, but this depends on the type of benefit you receive and how long you've been claiming it. It can also be backdated to the date you first became eligible.
There's no guarantee that you'll be accepted for an SMI. If you've been rejected for an SMI loan or you disagree with the amount awarded, you can request a mandatory reconsideration within one month of receiving your decision letter. This step must be completed before you can formally appeal the decision to an independent tribunal.
Can I transfer an SMI loan to a different property?
Yes, you can usually transfer an existing SMI loan to a different property.
In most cases, you'll need to repay your SMI loan when your home is sold or ownership is transferred, but if you're buying and moving to a new property, you can choose to transfer the loan to your new address instead. To do this, you must let your benefits provider know that you are moving and request that your loan be transferred.
You may need to reach out to a solicitor or conveyancer to help you with the paperwork involved, but you should be able to add any legal costs incurred to the outstanding balance on your SMI loan.
What happens to my SMI loan if my benefits are stopped?
If your benefits stop, your SMI payments will also stop. This is because, without benefits, you're no longer eligible for SMI.
However, what happens depends on why your benefits are stopped. If your benefits stop because you have returned to work or your working hours have increased, for example, your payments will usually continue for another four weeks to help you ease back into work and bridge the gap until your first paycheck.
If you're no longer entitled to benefits, however, your SMI payments will stop immediately, but the original terms still apply. In other words, you'll still repay the loan when you sell or transfer ownership of your home, and you won't be asked to pay back the loan or interest early.
If your benefits are sanctioned for whatever reason, your SMI payments will usually continue because a sanction will only reduce your standard benefit allowance, not stop your SMI payments.
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Conclusion
A Support for Mortgage Interest loan, or SMI loan, is a type of loan you may be eligible for if you receive certain benefits. It is designed to help you afford the interest payments on your mortgage or other eligible home improvement loans.
To qualify for an SMI loan, you must receive Pension Credit, Universal Credit, Income Support, Income-related Jobseeker's Allowance (JSA) or Income-related Employment and Support Allowance (ESA). If you don't qualify for SMI, you may be eligible for Breathing Space, which is another government scheme that gives you a payment holiday and pauses creditor action for 60 days. Extending your mortgage term can also lower your monthly payments if you're struggling with your current payments.
Whether you've already missed instalments or you're worried about future affordability, it's crucial that you seek help towards your mortgage payments from a debt help company or charity like Citizens Advice as soon as possible. Simply asking for assistance with mortgage interest support won't harm your credit score, and mortgage lenders must treat borrowers fairly and assess all options carefully.
