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  • Writer's pictureHayley Barker

Help with mortgage interest payments – Support for Mortgage Interest (SMI) Loans available from the

As interest rates have risen to their highest in decades, and with the financial markets predicting another hike later this year, many homeowners are struggling with inflated mortgage repayments and are looking for ways to reduce the financial burden.


Support for mortgage interest (‘SMI’) is an interest-bearing loan from the Department of Work and Pensions (DWP) to help pay towards the interest on your mortgage or other qualifying home loans – such as loans taken out for certain improvements to your home.


To qualify for an SMI loan, you must:


(1) Own your home, or be in a shared ownership scheme; and


(2) Be in receipt of one of the following qualifying benefits;


(a) Income-based Jobseeker’s Allowance (JSA);

(b) Income-related Employment and Support Allowance (ESA)

(c) Income Support;

(d) Universal Credit; or

(e) Pension Credit.


Whilst there is no guarantee that you will receive an SMI loan, if successful, the loan is paid directly to your lender and helps towards the interest on up to £200,000 of your loan or mortgage (limited to £100,000 if you’re in receipt of Pension Credit).


Repayment of an SMI loan is typically only required when the property is sold or transferred. You’ll currently pay 3.28% interest on an SMI loan - the rate might go up or down but will not change more than twice a year.


If your application is successful, you may want to consider what other options are available to you. That being said, even though you’ll pay interest on your SMI loan, it could be cheaper than other ways of borrowing money. For example, you might pay more interest if you get a loan from somewhere else like a bank or credit union – or if you change your mortgage payments. If a friend or family member gets a loan for you, they might pay more interest on their loan too.


For further information, visit: https://www.gov.uk/support-for-mortgage-interest


If you would like to speak with someone to help decide if an SMI is suitable, you should contact your local Citizen's Advice, or a financial advisor in the first instance.



Author: Hayley Barker (Paralegal) – visit Hayley’s profile to learn more about her.




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