Support for Mortgage Interest: how the DWP housing loan works
Published · 5 min read · Figures checked . UK rules and rates change, so check the official sources below before you act.
Support for Mortgage Interest (SMI) is a repayable government loan that helps some people on certain benefits with the interest on their home loan. This guide explains who qualifies, how much is paid, and how it is repaid.
What Support for Mortgage Interest is
Support for Mortgage Interest, usually shortened to SMI, is paid as a loan, not a grant. The Department for Work and Pensions (DWP) pays money direct to your lender to help with the interest on a mortgage for the home you live in, or on certain loans for repairs and improvements to it. It does not help with the capital, meaning the amount you originally borrowed, and GOV.UK says it does not cover insurance policies or missed payments (arrears). Because it is a loan, the amount paid builds up as a debt secured against the property, and interest is added to it. GOV.UK also says there is no guarantee you will get SMI for a mortgage or loan you take out, and there is no credit check or fee to apply.
Who qualifies and the waiting periods
GOV.UK says you must be getting one of three qualifying benefits: Pension Credit, Universal Credit, or income-related Employment and Support Allowance (ESA). How soon payments can begin depends on the benefit. For Pension Credit they can start from the date you begin receiving it. For Universal Credit they start after 3 months in a row, or after 3 months in total if you moved onto Universal Credit within a month of another benefit ending. For income-related ESA the wait is 39 weeks in a row. Payments can be backdated to when you first became entitled if you accept the loan later and are still eligible. If SMI stopped because you lost a benefit, GOV.UK lists some cases where it restarts straight away, such as restarting Universal Credit within 6 months.
The key figures and how the amount is worked out
SMI is not based on the interest rate your lender actually charges. The DWP uses a standard rate instead. As of 22 October 2026 GOV.UK gives that standard rate as 3.66%, and the Northern Ireland government site, nidirect, gives the same figure. The help is usually calculated on up to £200,000 of your loan. The limit is £100,000 if you get Pension Credit, or if you started another qualifying benefit before January 2009 and were then below State Pension age. If your lender charges more than the standard rate, there can be a shortfall that you cover yourself; if it charges less, the loan is still calculated on the standard rate. GOV.UK's own example is that 3.66% on £200,000 comes to £7,320 a year, or £610 a month.
A worked example
The following figures are illustrative only. Suppose someone has a £150,000 mortgage and qualifies. The DWP calculation is £150,000 x 3.66% = £5,490 a year, which is £457.50 a month (£5,490 divided by 12). If the lender actually charges 5%, the real interest would be £150,000 x 5% = £7,500 a year, or £625 a month, leaving a monthly gap of £625 - £457.50 = £167.50 that the household would still need to find. Separately, the SMI loan that builds up carries its own interest rate, 4.5% at the time of checking, added once a year. On a balance of £4,500, one year's interest would be £4,500 x 4.5% = £202.50. The 3.66% and 4.5% rates are different things, and mixing them up is a common source of confusion.
Repaying the loan
Nothing has to be repaid month by month. GOV.UK says the loan, with interest, is repaid as a lump sum when you sell or transfer ownership of the home, and that you will not be asked to sell just to repay it. You may be able to move the loan to a new home, and the DWP advises contacting DWP Loan Management before you complete a sale. When a home is sold, the SMI loan is repaid after the mortgage and any other secured loans taken out before SMI began. If there is not enough left, the unpaid balance is written off. GOV.UK's example: an £80,000 sale with £71,000 left on the mortgage leaves £9,000, so with £9,600 owed on SMI, £600 is written off. You can repay voluntarily, in amounts of at least £100 or the remaining balance if less. If the owner dies, a partner who lives in the home can usually inherit the loan; anyone else must repay it straight away.
Where this applies and common mistakes
Northern Ireland has its own version of the scheme, run by the Department for Communities, with its own application forms and offices described on nidirect. The GOV.UK page does not set out country differences, so people in Scotland, Wales and Northern Ireland can check the page for their own benefit office. The rates and limits on nidirect matched GOV.UK when checked. A common mistake is assuming SMI pays the mortgage itself or covers the whole of the interest; it is only a contribution at a standard rate. Another is overlooking that it is a debt secured on the home, which reduces what is left when the property is eventually sold. Some people also assume SMI needs a separate claim to the benefits office; GOV.UK says you fill in a form, your lender completes part of it, and it goes to the office paying your qualifying benefit. This guide is general information, not advice.
Free help
If you are worried about paying your mortgage, GOV.UK suggests speaking to your lender first, since some offer payment holidays, interest-only payments or a longer term. Free, impartial help is also available from Citizens Advice, MoneyHelper and Shelter. Many people find it helpful to ask for these options in writing and to keep a record of every conversation. The Financial Ombudsman Service can look at complaints about lenders if a firm cannot resolve a problem with you directly.
Check before you act
Rates, limits and waiting periods can change, so confirm the details on the official pages linked below before making any decision.
Sources
For information only. See our disclaimer and editorial standards. Spotted an error? Tell us.
