You are here: Home - Mortgages - First Time Buyer - News -

Universal Credit claimants to get faster access to Support for Mortgage Interest scheme

Written by: Shekina Tuahene
Changes have been made to the eligibility of the Support for Mortgage Interest (SMI) loan which could see 200,000 additional claimants of Universal Credit access help faster.

SMI is the help offered by the Gvernment to owner-occupiers in receipt of Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Universal Credit or Pension Credit.

The money helps homeowners unable to work or find work pay the interest on their mortgage, saving their homes from repossession and avoiding the additional cost to the taxpayer that would be incurred in the event of homelessness.

The scheme allows homeowners who are on benefits to receive support of up to £200,000 to pay the interest on their mortgage or a loan they have taken for home improvements while they look for work. 

Key changes to SMI

The conditions of the scheme have changed to allow people to claim after being on Universal Credit for three months, down from the previous requirement of nine months. Claimants also do not need to be unemployed to access the support, another change from the previous rules. 

Additionally, people can re-claim for SMI if they leave Universal Credit but return within six months. 

SMI will automatically be offered to people on Universal Credit through the Department for Work and Pensions (DWP). If they reject the support at first, they can still claim later as long as they are still eligible. 

The loan must be repaid when the claimant sells their home and they can contact the DWP if the loan needs to be transferred. 

Mims Davies, minister for social mobility, youth and progression, said: “The fear of losing your home when you have fallen on difficult times is incredibly stressful and makes getting back on your feet all the more difficult. 

“This increased support is an important lifeline to help provide stability for those who are seeking to find work and move back towards long-term prosperity.” 

A common sense change 

The Building Societies Association (BSA) welcomed the news. It said it had been calling for a reduction in the time it took for people to become eligible for SMI as the previous rules meant someone would be more than six months in arrears before they could access support. 

Paul Broadhead, head of mortgage and housing policy at the BSA, said: “This is a common-sense change from the Government. Enabling access to the SMI loan much earlier could well be the difference between a family keeping a roof over their heads or them facing the prospect of their home being repossessed and having to find  alternative, government-supported, rental accommodation.  

“Also, as SMI is a loan not a benefit, the changes introduced today should not have a long-term financial detriment on government expenditure.” 

The BSA noted that support was also available from lenders and noted that while arrears were yet to rise significantly, and said lenders were “sensitive to the rising number of people facing a squeezed household budget”. 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Octopus steps in to buy Shell Energy – what customers need to know

The deal is expected to complete in the fourth quarter of 2023 and will take Octopus Energy’s retail supply ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week