With interest rates soaring, many mortgage holders coming to the end of a fixed rate deal will see a bigger slice of their take-home pay being ringfenced for their mortgage repayments.

If you’re a homeowner, not receiving benefits and struggling to pay your monthly mortgage, the priority is to contact your lender. They want to help you meet repayments and will discuss your options and offer suggestions. These might include:

Making changes to your mortgage repayments shouldn’t be taken lightly; they may incur additional
fees. So, before doing anything, you may want to first look at your household budget and see if any
savings can be made.

For those receiving Universal Credit, Income Support, Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA) or Pension Credit, there is other support available through Support for Mortgage Interest (SMI).

What is SMI?

SMI is a government loan available to those in receipt of specific benefits. This loan goes towards mortgage interest payments and some other home costs – but not paying off the capital of your mortgage.

The loan is, itself, subject to interest. Therefore, you will be paying back more than you initially borrowed, but it might be a cheaper option than a different loan. You pay back the loan – usually when you sell your home or give it to someone else.

How can SMI be used?

• Mortgage for the home you live in.
• Loan to help you buy more of your home.
• Loan to help with other costs, such as legal fees and stamp duty.
• Loan to pay off your mortgage.
• Alternative finance arrangement, such as an Islamic mortgage – if you get Universal Credit or Pension Credit.

Before you apply, you need to decide if an SMI loan is the right way forward for you. There is information on our website that can help you work this through (www.citizensadvice.org.uk). One alternative is getting a different loan. We can help you understand your options.

Applying for an SMI

If you want to find out more, get in touch with the office you usually talk to about your benefits and get hold of an SMI application form. We can help you complete it if you want us to – but remember we cannot tell you what you should write.

For more information about SMI or help if you are finding it difficult to meet your mortgage repayments, visit the Citizens Advice website: https://www.citizensadvice.org.uk/

Need advice?
Phone our general Advice Line on 0800 144 8848 (Mon-Fri 10-5). Alternatively, find more information at citizensadvice.org.uk. If you’re in Surrey Heath: call 01276 417900 and leave a message for a call back or email advice@ca-sh.org.uk.