Owning a home

Last updated: 21/04/2022

Buying a home and help to pay your mortgage.

Money Advice Scotland

Contact for detail of services that give free money advice.

Website: www.moneyadvicescotland.org.uk

Email: info@moneyadvicescotland.org.uk

Buying a home

As well as deciding what kind of home is best for your family, and where it should be, you will also have to work out how much you can afford to spend.

A mortgage provider, your bank or a financial adviser can advice you how much you are able to borrow and the type of mortgage that is best suited to your needs. You can have a mortgage agreed in principle and then start looking for your new home.


Help to pay your mortgage

If you are struggling to meet your mortgage payments you should talk to your mortgage provider for help and advice.

If you are getting certain benefits, you might be able to get a loan from the Department for Work and Pensions (DWP) to help pay the interest on your mortgage. It is called the Support for Mortgage Interest loan or SMI.

The loan will pay 2.09% interest on a mortgage of up to £200,000. It is paid monthly directly to your mortgage provider. If your monthly mortgage interest repayments are more than is covered by SMI you will have to pay the rest yourself.

You will be charged 0.8% interest on the amount of loan you have borrowed but it may be cheaper than borrowing money from a bank or using a credit card.

The SMI loan must be repaid when you die or sell your home.

Can I get a SMI loan?

To get SMI loan you must be out of work and receive:

  • Income Support
  • income-based Jobseeker’s Allowance
  • income-related Employment and Support Allowance
  • Universal Credit, or
  • Pension Credit.

There is a 39-week waiting period from the time you claim SMI until your first payment is made (unless you are getting Pension Credit, in which case you can get the loan immediately).

If you do any paid work during these 39 weeks your waiting period will stop but it can start again the next time you are out of work.

For more information and how to apply visit: https://www.gov.uk/support-for-mortgage-interest