Pensioners may get mortgage support on loans up to £100,000 – are you eligible?

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It is not unusual for older people to still be paying off their mortgage, even once they have entered retirement. These costs can weigh heavy on the shoulders of pensioners, but they may be able to get support via Support for Mortgage Interest (SMI).

What is Support for Mortgage Interest?

SMI, also known as Help with Housing Costs, is a loan designed to help with the interest on people’s mortgage payments or home improvement loans.

Because it is a loan, the idea is that the money will eventually be paid back if there is enough equity in the property.

The loan is repaid when the property is sold, its ownership is transferred, or when someone dies and their property becomes part of their estate.

Who is eligible?

People who receive any of the following benefits may be entitled to SMI:

  • Pension Credit
  • Income Support
  • Income-related Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Universal Credit (UC)

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To receive SMI, someone must also be liable to pay interest on their mortgage or have an eligible home improvement loan.

With Pension Credit being one of the primary benefits which makes people eligible for SMI, pensioners who are on a low income could potentially take advantage of the extra support towards their mortgage.

How much support can people get?

Recipients of SMI can get help paying interest on up to £200,000 of their mortgage or loan, but unfortunately, pensioners may not be able to get as much support.

This is because people who have qualified for SMI via Pension Credit can only get help on up to £100,000 of their mortgage or loan).

However, since there is a fair chance older people will have paid off more of their mortgage than someone younger who is claiming SMI through a different benefit, this may not present an issue for many pensioners.

Interest is calculated at a rate of 1.7 percent.

In most cases, the SMI recipient does not actually get paid the money, rather it is made directly to their lender.

How to claim

People who receive Pension Credit should contact the Pension Service if they wish to claim SMI.

Pension Credit is a benefit for people who have reached state pension age and are on a low income.

Britons in almost 1.5 million households currently claim Pension Credit, but there are many more people who have not claimed despite being eligible.

The process of finding out whether someone is entitled to Pension Credit can be done over the phone, and the operator will fill in the applicant’s form for them.

Anyone interested in finding out if they can receive Pension Credit should call the claim line on 0800 99 1234.

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