When everyone has a home

Housing advice for Northern Ireland

Changes to help with housing costs for homeowners

If you own your own home and receive certain benefits, you can apply for Support for Mortgage Interest. This is a payment made to help homeowners with the cost of the mortgage on their mortgage and on certain loans.

It's now a loan payment that will have to be paid back

How this benefit has changed

Since 6 April 2018, any financial assistance given to homeowners to help with the interest costs on a mortgage or loan became a loan payment. Interest is charged on any money you receive, although this will be at a reasonably low rate. This means that you may eventually have to pay back the money that you get and any interest on the loan.

Finding out about the changes

The Department for Communities wrote to everyone who received Support for Mortgage Interest. The letter explained that SMI in its current form is ending and that you will no longer receive this benefit to help with your housing costs after 5 April 2018.
The letter then explained that you can apply for a loan to help with your mortgage and loan costs after that date. A company called SERCO should have telephoned you to talk to you more about the option of applying for a loan.

Applying for the loan

SERCO will try to call everyone who receives SMI to discuss the changes. They will explain what you must do if you want to apply for a loan and will talk about other ways you can try to manage your mortgage and loan costs.

Are there any costs?

You won’t have to pay any fees to set up the loan, but you will have to pay interest on what you borrow. The interest will be set at quite a low rate, currently 1.7%, but this could add up to quite a bit over a number of years.
Example: Francis receives £198 Support for Mortgage Interest every month. He takes up a loan in April and gets this same amount for three years. After these three years, his health improves and he takes up a new job. Over the three years, Francis has borrowed £7,722. Once interest is added, his repayment amount is £7926.12.

Before you speak to SERCO

There are a few things that you should find out as soon as you get your letter. You should
  • contact any mortgage or secured loan lenders to find out how much is left on the balance of your loan, and how many years you have left to pay this and
  • find out how much Support for Mortgage Interest you are currently receiving, either by checking letters from the Jobs and Benefits Office or phoning your claim office.
If you live with anyone else who is named on the property deeds, you will need to talk to them about this change. All owners who live in a property must agree to accept the loan.

Repaying the loan

You don’t have to make regular repayments towards the loan. The government will only expect this money back when
  • You sell the property or
  • You transfer the property to someone else or
  • You die, or the last remaining person in your benefit claim dies.
The money that you owe will normally be registered as a charge on the property. This means that the money will be paid back out of the proceeds gained from selling the property or from your estate. However, if you want you can make voluntary repayments to clear the loan before this happens. Any voluntary payments must be of at least £100.

What happens if there’s not enough equity to pay back the loan?

When you sell your property, you may have other secured debts which need to be paid off, such as a remaining loan, rates arrears or a mortgage. If there is not enough equity in your property to repay all or any of the loan after certain other debts have been cleared, the amount owed will be written off.
However, if you sell the property for less than its market value and there would have been equity to repay the loan if you had sold it at the market value, the Department could decide to treat you as though you did sell the property at the higher price. If this happens, there is a risk that the Department will insist you pay the loan, but you could challenge this decision.

Not sure what to do?

Taking out another loan on a property is a big decision, and it’s best to get advice before you agree to take on any more debt. You can call our dedicated housing advisers if you’d like some advice on your options. Our advisers can discuss your situation with you and give you more information about ways to deal with debt.

Housing costs for homeowners under universal credit

Your housing costs will be based on the interest on your mortgage and any loans secured on your home. You can claim for help on a maximum of £200,000 of borrowing secured against your home. The amount you receive will be 2.61% of your total borrowing, as long as this is below £200,000. You will normally have to wait nine assessment periods, roughly nine months, from when you start to get Universal Credit before you can get any help with your interest costs. If you were receiving certain other benefits before this date, you may not have to wait this long for payments. 

Problems for working homeowners under universal credit

If you claim Universal Credit, you can get help with your housing costs. However, you will not receive any help with your housing costs if
  • You are a homeowner and
  • You have earned income. 
  • Your housing costs will stop if you do any paid work. This could mean that taking up an offer of short-term, temporary work could actually leave you less well-off.
Get advice if you are a homeowner who is receiving universal credit and you have been offered a temporary job.