Future changes to Support for Mortgage Interest

On 18th June, the rate of Support for Mortgage Interest (SMI) will fall from 3.12% to 2.61%. This could have significant impacts on the ability of SMI recipients to stay in their homes.

However, this isn’t the only change on the way for Support for Mortgage Interest. Over the next few years there will be more changes that will further restrict and alter this benefit.

SMI under Universal Credit

Currently, SMI is available to claimants of Income Support; income-based JSA; income-based ESA; and Pension Credit. Claimants are permitted to work up to 16 hours per week, and continue to claim SMI. This will change under Universal Credit.

Universal Credit is replacing 6 benefits, including Income Support, income-based JSA and income-based ESA, between September 2017 and 2022.

Under Universal Credit, SMI will not be payable if the claimant or their partner is undertaking any paid work.

Conversion of SMI to a loan

In the 2014 Summer Budget, there was a proposal that from 1st April 2018, all new SMI payments would be loans – meaning the benefit will become a “Loan for Mortgage Interest”, or “LMI.”

This loan will be secured against the house in question, and will charge interest – the interest rate will be equivalent to the OBR’s forecast of gilts.

Advice & help for homeowners

Homeowners can find out more about the eligibility criteria and application for SMI on our housing advice website, housingadviceNI. You can also phone our advice line on 028 9024 5640, from 9.30am-4.30pm, Monday to Friday.