People with a mortgage could receive £610 monthly towards payments | Personal Finance | Finance

Support for Mortgage Interest (SMI) is a lesser-known scheme designed to assist those on low incomes who are finding it difficult to meet their monthly mortgage repayments. The exact amount you can receive will depend on the outstanding balance of your mortgage and the current SMI interest rate.

The scheme can cover interest on up to £200,000 of your mortgage. However, if you’re receiving Pension Credit or started claiming another qualifying benefit before January 2009 and 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% so, 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.

This money is typically paid directly to your lender and you can request to halt 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 reside in and must be claiming a qualifying benefit such as income support, jobseeker’s allowance, employment and support allowance, universal credit and pension credit.

If you claim the support through pension credit, the payments should start from the date you receive this benefit. On the other hand, if you’re claiming through Universal Credit, you’ll only receive SMI after getting this payment three months consecutively.

SMI loans do not require credit checks and further eligibility details can be found on the Gov.uk website. SMI can only be utilised to help with interest payments on your mortgage for your primary residence or loans taken out for home repairs and improvements. It cannot be used to cover missed mortgage payments or any insurance policies you may hold.

It’s crucial to remember that this support is a loan and will need to be repaid with interest. Typically, this will be paid when you sell or transfer ownership of your property. You can also voluntarily repay the loan if you prefer.

To apply, a form must be filled out and signed. Your lender must then complete it and send it to the government office that handles your benefit.

Before beginning the process, you’ll need to determine how much mortgage or home improvement loans you have remaining to pay. You’ll also need to know how much interest you’re paying on your mortgage or home improvement loans and get your partner’s agreement to sign the form if necessary.

If you qualify for SMI, a loan offer will be made but you can choose to decline it. The offer will remain available as long as you meet the SMI eligibility criteria.

SMI payments can be backdated to when you were first entitled to the loan. Applications can also be made using the relevant contact for the benefits you receive, such as the Pension Service, Universal Credit account or Jobcentre Plus.