Government extends mortgage help for homeownersWait for help with mortgages cut to 13 weeks

07 January 2009


If you're selling a house you will need a HIP

Homeowners who lose their jobs can now claim Support Mortgage Interest (SMI) after 13 weeks instead of 39 and on the first £200,000 of their mortgage. 

If you're concerned about meeting your mortgage repayments follow the Which? guide to mortgage arrears and repossession.  Or if you're considering re-mortgaging, take a look at our mortgage calculator which lets you compare thousands of mortgage deals. 

Extension to Support Mortgage Interest

Support Mortgage Interest (SMI) pays the mortgage interest for those on means tested benefits, such as Income Support, Jobseeker's Allowance and Employment and Support Allowance.  

The Government has cut the waiting period to qualify for the benefit from 39 weeks to 13 weeks and has increased the mortgage limit from £100,000 to £200,000 with effect from 5th January 2009.  Those with mortgages over £200,000 will still be able to claim but will only receive relief on the first £200,000.

People who have already applied for SMI and are waiting will benefit from the new rules as well.  Those in the system and who have already waited for 13 weeks will qualify immediately. 

Work and Pensions Secretary James Purnell said, 'We have changed the rules to make sure even more people can get help with their mortgage payments if they lose their job.  We have brought in changes as quickly as possible so people don't have to wait too long for this support.'

Other help for struggling homeowners

The Government has introduced numerous other initiatives to support householders in difficulties with their mortgage. 

These include a new mortgage support scheme which allows those who have suffered a significant and temporary loss in income to defer a proportion of their interest payments for up to two years.  

In October a pre-action protocol was introduced which sets out the steps lenders should take before starting repossession proceedings and makes it clear that repossession should be a last resort.  

And the Prime Minister Gordon Brown has urged lenders to follow the lead of Bradford & Bingley, Northern Rock and RBS who have promised to wait six months before beginning a repossession claim. 

© Press Association 2009

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