FAQs

FAQs 

What Government help can I receive?

If you have a Mortgage Payment Protection Insurance (MPPI) policy, you must claim from that before seeking any help from the Government.

The Government makes decisions on whether to help individuals based on its eligibility critera.  Whereas in the past there used to be three schemes available to help homeowners stay in their homes, there is currently only one scheme in England, although another scheme exists in Scotland and parts of Wales.

It's very important that you sign on first if you've just been made redundant.  Become familiar with the benefits you're entitled to as this will speed up the process of getting the Government help you need.

Will the Government pay for my mortgage?

Unfortunately, no!  The one remaining scheme which is called Support for Mortgage Interest (SMI) can pay the mortgage interest for you, but you will have to pay the rest of the mortgage payments yourself.  

An alternative strategy would be to see if you can switch to an interest only mortgage as a temporary measure.  Most banks and building societies recognise that sincere people do want to pay their mortgages and that re-negotiating the terms of mortgage repayments can be mutually beneficial for all parties concerned. Make an appointment to see your mortgage lender straight away so that an agreement can be reached to ease the situation. Also, it is important that you keep them informed and up-to-date on any developments to ensure that you maintain a good level of trust between yourself and the lender.

With the Support for Mortgage Interest (SMI) scheme the Government will cover interest payments on the first £200,000 of the outstanding mortgage for the time that you are unable to afford them.  The level of interest will be set by the Government itself.  A very good advantage of this scheme is that if the mortgage rate should increase the SMI rate will also increase accordingly to match it.

Who would be eligible for this scheme?

People who are receiving Income Support, Income Based Jobseeker's Allowance, Income Based Employment and Support Allowance or Pension Credit.  If you have been unfortunate enough to have recently lost your job or had an income cut it is important that you sign on immediately or else you will not be eligible to receive SMI.  This benefit will commence operation 13 weeks after the mortgage payer claims the initial benefit. However, if you are receiving Pension Credit you can claim straight away and the money will be paid directly to your lender. 

People on Jobseeker's Allowance will be eligible to receive SMI for a period of up to two years. For people on other benefits there is no limit on the period of time that they can receive this benefit.

Eligibility for this scheme will automatically be assessed when applying for an income related benefit - this currently operates in England, Wales and Scotland and there is a similar system operating in Northern Ireland.

SMI will cease paying out monies once the benefit stops. This usually happens when a person returns to work or starts working extra hours and gets paid more money.  However, a person may be able to claim what is known as Mortgage Interest Run On (MIRO) to help with the transition in circumstances.

MIRO can be claimed for four weeks and will be the same amount that Support for Mortgage Interest paid.  MIRO is paid directly to the person responsible for paying the mortgage rather than to the lender.  To ascertain if you are eligible to receive this assistance visit Gov.uk.

Who isn't eligible to receive Support for Mortgage Interest (SMI)?

People/couples who have more than £16,000 in savings, or if the property claimed for is a second home.

If you are claiming for Pension Credit the amount of mortgage you can claim interest payments for is capped at £100,000, not £200,000. However, the claimant is not obliged to wait the initial 13 weeks before claiming SMI.