Homeowners who are claiming certain benefits from the government may also be able to claim for help on the interest payments of their mortgage. The name for these benefits varies depending on your area or local council. Programs called “help with housing costs” or “Income Support Mortgage Interest” or similar names refer to the same programs. It is important to note that ISMI benefits will not help you pay the mortgage or loans you have, just the interest on them. The rate used to calculate the benefits for ISMI is based on the Bank of England’s average mortgage rate.

If you already receive ISMI payments you should also read this article, because changes have just been put in place that will affect your monthly ISMI payments.

Who Qualifies?

You qualify for ISMI, if you, or your partner, receive income support, income based jobseeker’s allowance, pension credit or an income related employment and support allowance.

You can also use ISMI payments to pay for loans you used to pay for essential repairs on your home or to buy your ex-partner’s share in your home if you have separated or divorced.

You can claim on mortgages of up to 200,000 pounds, or 100,000 pounds if you claim pension credit. If you have only recently started claiming for pension credit you will qualify for a 200,000 pound mortgage for 12 weeks after you start claiming.

However, it is important to note you cannot claim SMI on mortgages you purchased after starting to receive government benefits. If you increased your mortgage balance after starting to receive benefits you can only claim for the balance you had before starting to claim for benefits.

How long will I have to wait?

It depends. if you are over 60 and you are currently claiming a pension credit you will receive help immediately. However, non-pensioners will have to wait around 13 weeks from claiming to receiving the SMI benefits.

How is the ISMI benefit calculated?

Your ISMI payments are calculated using the Bank of England’s published Average Mortgage Rate. Currently that rate is 3.63 percent. ISMI benefits will only vary if that rate changes by 0.5 percent or more. This is important for people currently receiving SMI benefits because before October 2010 the rate was set at 6.08 percent. This allowed homeowners to pay their interest and some of their capital repayments with their SMI payments. Now that the rate has been adjusted to current mortgage interest rates it is unlikely you will be able to stretch your SMI benefits to pay anything but your mortgage interest payments.

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