Support for mortgage interest: Could it help you?

14 May, 2025

Finding it hard to meet your monthly mortgage repayments? If so, you could benefit from the Support for Mortgage Interest (SMI) scheme…

If you’ve run into financial difficulty – for example, you and/or your partner have been made redundant – and you’re struggling to pay your monthly mortgage repayments, you might be able to claim help from the government’s Support for Mortgage Interest (SMI) scheme.

Unfamiliar with the initiative? Here’s what you need to know…

First up, what exactly is SMI?

SMI is a loan from the government designed to help homeowners finding it difficult to meet their mortgage repayments.

It covers interest payments (not the actual mortgage) on the first £200,000 of the outstanding mortgage, and the level of interest paid on the loan is set by the government and not the mortgage lender, which is 4.1% as of May 2025*.

As it’s a loan, you’ll have to pay it back (plus interest) when you sell or transfer ownership of your home.

Who’s eligible?

To be eligible for SMI, you must own your own home and be receiving one of these benefits:

Income support
Income-based Jobseeker’s allowance (JSA)
Income-related Employment and Support Allowance (ESA)
Universal Credit
Pension Credit

This means if you’ve currently lost your job, you must sign on at your local Job Centre if you receive Income Support, or Pensions Office if you receive Pensions Credit. When payments start will depend on the benefit(s) you’re getting.

Are there any exemptions?

You can’t use SMI to cover missed mortgage payments or towards insurance policies.

You won’t get SMI if you have over £16,000 in savings as you won’t be eligible for the benefits.

Also, if you’re claiming Pension Credit, you can only get help on the first £100,000 of your outstanding mortgage.

When will you receive your first payment?

If you get Income Support, Jobseekers Allowance or Employment and Support Allowance, you’ll need to claim for 39 consecutive weeks before you get your first SMI payment. This will typically go to straight to your mortgage lender rather than into your bank account. This is different if you’re claiming Pension Credit or Universal Credit. With Pension Credit, you’ll get help straight away. With Universal Credit, you’ll need to get it for three months in a row before you get the SMI payment.

How long can you get SMI for?

There’s no limit to how long you can get SMI if you receive Income Support, ESA, or Universal or Pension Credit. But if you’re claiming Jobseeker’s Allowance, you can only benefit from the scheme for a maximum of two years.

Is the loan just for mortgage repayments?

No – homeowners can get SMI to cover the interest on a loan taken out for essential repairs or home improvements, such as fixing a dangerous fault or adapting the building for a disabled person. The same goes if someone splits from their partner and buys their share in the property.

How and when do you pay back the loan?

As mentioned, you’ll need to pay the loan back in full when you sell your home or transfer its ownership.

If you die and your house gets passed on to your civil partner or spouse, the loan can be paid back when they die – the Department for Work and Pensions will recover the amount from the sale of your home.

You also have the option to pay back the loan at any time – for instance, if you find employment again and can make the repayments.

The minimum repayment you can make is £100 or the outstanding balance, if it’s less than that.

Bear in mind your SMI loan will accrue interest every month. The rate of interest is variable and will impact the overall amount of interest you pay on the loan.

Interested? What to do next…

Before claiming SMI, it’s worth speaking with your mortgage lender to see if they offer any financial relief, for instance, mortgage payment holidays.

You must notify your lender immediately if you’re struggling with payments.

If you want to go down the SMI route, we strongly recommend having a thorough read of the terms and conditions on the Gov.uk website. Then, if you’re happy with everything, you can make a claim from there.