DWP Rule Change Allows Universal Credit Claimants to Apply for Additional £1,000

A Department for Work and Pensions change could allow thousands of Universal Credit claimants to apply for £1,000 extra mortgage bill support.

DWP Boosts Mortgage Help for Struggling Homeowners

The Department for Work and Pensions’ (DWP) Support for Mortgage Interest (SMI) provides a loan to struggling people on Universal Credit and other benefits to help them cover their mortgage, as reported by BirminghamLive.

Universal Credit claimants can get help to pay the interest on home loans up to £200,000, while those on Pension Credit can get support for mortgages up to £100,000. This support helps people keep up with their mortgage payments while they’re on benefits.

A recent DWP update lets households borrow an extra £1,000 compared to before. At the moment, more than 200,000 households on Universal Credit have mortgages, but only about 12,306—just 1.1%—have applied for SMI, according to Policy in Practice.

The DWP says: “If you’re a homeowner or have bought a shared ownership property, you might be able to get help towards interest payments on your mortgage and loans you’ve taken out for certain repairs and improvements to your home. This help is called Support for Mortgage Interest (SMI).”

How the DWP’s SMI Loan Works for Homeowners on Benefits

The Department for Work and Pensions also adds that SMI is given as a loan, which you’ll have to pay back with interest when you sell or transfer your home, unless you move the loan to a new property. You must be receiving a qualifying benefit to be eligible for SMI, but it’s not guaranteed for any new mortgage or loan you take out. SMI also won’t cover your insurance costs or any missed mortgage payments.

If you’re eligible for Support for Mortgage Interest (SMI), it will typically help cover the interest on up to £200,000 of your mortgage or loan.

If you’re already getting SMI and switch to Pension Credit within 12 weeks of stopping your other benefits, you’ll continue to get help with the interest on up to £200,000. Right now, the interest rate for SMI is 3.66%.

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