9. What does SMI cover
SMI can be used to cover the interest on your mortgage and certain loans which you’ve taken out to purchase, repair or carry out essential adaptations to your home. SMI won’t cover:
- paying the balance on your mortgage
- loans which you’ve secured on the property where the money has paid for something other than repairs
- loans for improvements, such as adding a conservatory
- arrears on your account
- insurance payments
SMI will cover interest on an amount up to £200,000 if your loan was taken out after 05 January 2009 or up to £100,000 if you receive Pension Credit or your mortgage was taken out before 05 January 09. The interest rate used to calculate how much assistance you get is 2.61%.
If your interest rate is lower than this your benefit payment will be higher than the interest only payment on your loan. This money will be credited to your mortgage account. If your rate is higher you will have to make up any shortfall yourself. For further information or to apply please visit the Government's advice pages.