Support for Mortgage Interest (SMI) Shortly To Become a Loan Not a Grant

The Department for Communities (DfC) is reminding customers who receive help with their mortgage costs through ‘Support for Mortgage Interest’ to take action before the start of April when the benefit will end and will instead be offered as a loan.

Support for Mortgage Interest (SMI) helps claimants on income based benefits by paying towards the interest on their mortgage and/or home improvement loan. The qualifying benefits are Pension Credit, Universal Credit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance. 

SMI is changing from a benefit to a loan on 6 April 2018 for all existing and new claimants who are entitled to help with housing costs.

The Department has written to around 9,000 affected claimants advising them of the change and what options are available to them. Around 70% of claimants have already responded.

It is important that affected claimants decide how they are going to continue paying the interest on the mortgage or home improvement loan before payments cease on 5 April 2018.

SMI loans will be paid by the Department in the same way as the SMI benefit is now. If claimants decide to accept the offer of a loan, it does not require credit checks and will only be repayable with interest when the property is sold or ownership is transferred. Only people who end up with equity in their property will have to pay it back. If there isn’t enough equity, any amount that can’t be paid back will be completely written off.

Customers can read more about SMI and the upcoming changes at: https://www.nidirect.gov.uk/articles/help-mortgage-interest-payments

Customers are also encouraged to talk to their mortgage lender and seek independent advice. Organisations that can provide further support include the Independent Welfare Changes Helpline on: 0808 802 0020, Housing Rights on: 028 9024 5640, Citizens Advice Debt Advice on Freephone: 0800 028 1881, Money Advice Service on Freephone: 0800 138 7777 or a local independent advice provider.

ABC Note: 

1. The Chancellor announced that SMI would change from a benefit to a loan in the Summer Budget 2015.
2. The interest rate charged for the loan will be the rate that it costs government to borrow the money which can change up to twice a year. The expected rate for April 2018 is 1.5%

Following notification letters, the follow up phone calls to customers are being handled by Serco on behalf DfC