Owning a home

Last updated: 13/04/2021

Buying a property may be an option for you. If you already own a home there may be help if you are having difficulty making your mortgage payments.

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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 put to a mortgage each month and how much of a deposit you have. 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 of Work and Pensions 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 charge interest of 0.3% interest on the amount of loan you have borrowed but it may be cheaper that borrowing money from a bank or credit card to pay your mortgage. The SMI loan must be repaid when you die or sell your home.

Who gets SMI loan?

To get Support for Mortgage Interest 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’re 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 can start it 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