Latest news with #SupportforMortgageInterest
Daily Mirror
2 days ago
- Business
- Daily Mirror
People on low income with mortgage could be eligible for £610 each month
The little-known scheme can help eligible homeowners struggling with their mortgage repayments Support for Mortgage Interest (SMI) is a scheme that helps people on low incomes who are struggling to meet their monthly mortgage repayments. The exact amount you can get will depend on how much of your mortgage you still have to pay and the current SMI interest rate. The scheme can cover interest on up to £200,000 of your mortgage. However, if you're on Pension Credit or started claiming another qualifying benefit before January 2009 and you were below state pension age at the time you can only get up to £100,000. The current SMI interest rate stands at 3.66%. As such, if you qualify for the £200,000 figure, you would receive £610 per month or £7,320 per year to help cover the interest of your mortgage, according to government data. The money is usually paid directly to your lender, and you can request to stop the payments at any time by contacting the office that handles your benefits. When the payments start will depend on the benefits you claim. To be eligible for SMI, you must have a mortgage or home improvement loan for the property you live in and must be claiming a qualifying benefit. This can include income support, jobseeker's allowance, employment and support allowance, universal credit and pension credit, reports the Express. For anyone claiming the support through pension credit, the payments should kick in from the date you start receiving this benefit. However, if you're applying via Universal Credit, you'll receive SMI after getting this payment three months in a row. There is no credit checks for SMI loans and more eligibility information can be found the website. SMI can only be used to help cover interest payments on the mortgage for the home you live in or loans you've taken out for repairs and improvements to your home. You cannot use the support to pay missed mortgage payments or any insurance policies you may have. It's important to highlight that this support is a loan and will need to be repaid with interest. This will usually be paid when you sell or transfer ownership of your home. You can also make voluntary repayments if you wish. You'll need to fill out and sign a form in order to apply. Your lender must then complete it and send it to the government office that pays your benefit. Before you start the process, you'll need to find out how much mortgage or home improvement loans you have left to pay. As well as how much interest you're paying on your mortgage or home improvement loans and get your partner to agree to sign the form if applicable. If you do qualify for SMI, you'll be offered a loan but you can still choose to turn this down. The offer will remain available for as long as you meet the SMI eligibility criteria. SMI payments can also be backdated up to when you were first entitled to the loan. You can also apply using the relevant contact for the benefits you receive, such as the Pension Service, Universal Credit account or Jobcentre Plus.
Scottish Sun
27-05-2025
- Business
- Scottish Sun
Little-known way Universal Credit households can get housing help boost worth £6,000
Plus, find out what other help is available if you're struggling with mortgage payments BANK BOOST Little-known way Universal Credit households can get housing help boost worth £6,000 Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) HUNDREDS of thousands of people on Universal Credit or other benefits could be getting extra help with their mortgage payments. A little-known scheme called Support for Mortgage Interest (SMI) is aimed at helping benefit claimants who pay be struggling with their monthly payments. Sign up for Scottish Sun newsletter Sign up 1 Support for Mortgage Interest is available to those on Universal Credit and other benefits Credit: Alamy It can give a boost of hundreds of pounds a month to those who may otherwise be at risk of missing mortgage payments. Roughly 200,000 households receiving Universal Credit have mortgages, according to government figures. SMI is a loan used to pay the interest charges on mortgages. If you're on Universal Credit, SMI will help you pay the interest on up to £200,000 of your mortgage. Those on Pension Credit can get help on up to £100,000 of their mortgage. The interest rate used to calculate the amount of SMI you'll get is currently 3.66%. That means if you have £250,000 of your mortgage left to pay and you're eligible for SMI for up to £200,000, at the current SMI interest rate you'll get a loan of 3.66% of £200,000 across the year. That's equivalent to £7,320 a year or £610 a month. It's worth noting that SMI is not free money and there is a catch. You will need to pay it back as a lump sum when you sell or transfer your home ownership, and there is interest to pay. I'm on Universal Credit & I don't know how to survive - I even lost £600 because my husband decided to get a job, it's just impossible However, it is designed to help people who are struggling with their payments so the interest charged is relatively low. The current SMI repayment rate is 4.1%. Meanwhile the average mortgage rate is currently 4.62% for a two-year fix or 4.58% for a five-year fix, according to Rightmove. The Government can change the SMI repayment rate twice a year. If you die before you've paid off your SMI loan, it will not need to be repaid if your home is left to a surviving partner. But the loan must be repaid if your home is left to anyone else or it's sold. If you're struggling with your mortgage payments it's still worth contacting your mortgage lender for help first. Other people may have enough savings to cover mortgage payments for the short term, so they might opt not to apply for any extra support. Who is eligible for SMI? You can claim SMI if you're on Universal Credit or other specific benefits. The other qualifying benefits are: Income support Income-based jobseeker's allowance (JSA) Income-related employment and support allowance (ESA) Pension credit The scheme was extended in 2023 to make more people eligible. Under the new rules, you only have to have been claiming Universal Credit for a minimum of three months to apply. Before the change, it was available only to those who had been claiming Universal Credit for at least nine months. If you're on Pension Credit you can start getting the loan straight away. Those on Income Support, income-based JSA or income-based ESA must have been on it for 39 weeks in a row. How can you apply? You should contact the office that pays your benefit to find out if you're eligible for SMI. If you get or have applied for income support, income-based JSA or income-related ESA, contact Jobcentre Plus. You can do this by calling 0800 169 0310. If you get or have applied for pension credit, contact the Pension Service by calling 0800 731 0469. Those on Universal Credit can either: Add a message to your journal on your Universal Credit account Contact the Universal Credit helpline on 0800 328 5644. What other mortgage help is available? Missing a payment on your mortgage can have a severe impact on your credit rating. If you struggle with mortgage repayments over a longer period of time, lenders could start legal action that could end up costing you your home. If you think you're going to have a problem with your monthly mortgage repayment you should get in touch with your lender immediately. They have certain schemes in place to help you if you're struggling. You can temporarily ask to switch your mortgage to interest-only, or extend your term to bring monthly payments down. You won't need to to switch your mortgage to interest-only, or extend your term to bring monthly payments down. If you do this it won't affect your credit score for the first six months. If anyone using the temporary measures decides to return to their original plan within six months, they are free to do so. You can also ask your lender about the Breathing Space scheme if you find payments unaffordable. Under this scheme, no debts will earn interest, and no fees will be added for 60 days. You'll be protected from debt collectors and bailiffs. You may also be able to apply for a payment holiday, which is when you don't need to pay anything. However, interest and charges may continue to be added, and missed payments will need to be made in the future. Every company has a different policy, so you'll need to get in touch to find out what support is available to you. Other things you can do include contacting your local council to see if they have any schemes to help struggling families. For example, the Household Support Fund could help you get free cash, food vouchers, or help for bills like rent and energy. You should check what your specific council offers as it varies across different areas. Another option is to check if there's any other benefits you're entitled to. Entitledto's free calculator works out whether you qualify for various benefits, tax credits and Universal Credit. Debt charity StepChange also has a benefits checker which is free to use and won't record your results.
