Support for Mortgage Interest (SMI) on Universal Credit (2026)
1. Universal Credit and Mortgages
Universal Credit (UC) is designed to help with rent. It does not pay your mortgage directly.However, if you are a homeowner on UC, you can apply for Support for Mortgage Interest (SMI) to help prevent your home from being repossessed.
2. What is SMI?
SMI is a loan from the government to help pay the *interest* on your mortgage (up to a maximum of £200,000, or £100,000 if you receive Pension Credit).- It is a Loan: Since 2018, SMI is no longer a free benefit. You must pay it back with interest.
- Interest Only: It only covers the interest part of your mortgage. It does not pay off the "capital" (the actual amount you borrowed) or any insurance policies/arrears.
- The Rate: The DWP uses a standard interest rate to calculate the payment, which might be lower than your actual mortgage rate.
3. When do you qualify?
In 2026, the rules for claiming SMI on Universal Credit are: 1. You must have been claiming Universal Credit for 3 consecutive months (the waiting period was reduced from 9 months to help with the cost of living crisis). 2. You must have zero earnings from work during those 3 months. If you earn even £1 from employment or self-employment, you lose your entitlement to SMI.4. How the Loan is Repaid
You do not have to make monthly repayments on the SMI loan.- When it is repaid: The loan (plus the interest the DWP charges you) is only repaid when you sell the property or when ownership transfers to someone else.
- Negative Equity: If there isn't enough equity in your house when you sell it to clear the mortgage *and* the SMI loan, the DWP usually writes off the remaining SMI debt.
5. Alternatives to SMI
Because SMI is a loan that eats into the equity of your home, you should consider alternatives before accepting it:- Mortgage Holiday: Ask your lender for a temporary payment holiday.
- Switching to Interest-Only: Ask your lender if you can temporarily switch to an interest-only mortgage to lower your monthly payments.
- Extending the Term: Ask to extend the length of your mortgage to bring down the monthly cost.
6. How to Claim SMI
1. Wait for the letter: After you have been on UC for about 2 months with no earnings, the DWP will automatically send you an SMI offer pack. 2. Speak to the provider: The pack will include details for a company (currently Serco) who manage the loans. They will explain the terms. 3. Sign the agreement: You must sign the loan agreement and have a charge placed on your property at the Land Registry.7. Expert Tip: Service Charges
If you own a leasehold flat, Universal Credit CAN help pay your monthly/annual Service Charges as a grant (not a loan).- You do not have to wait 3 months for this.
- You must provide your annual service charge breakdown on your UC Journal under "Housing Costs."
- UC will not pay for major works or ground rent, but they will pay for general maintenance, cleaning, and building insurance elements.