Support for Mortgage Interest (SMI)
Repaying your loan
You’ll need to repay your SMI loan as a lump sum with interest if you sell or transfer ownership of your home.
The interest you pay can go up or down, but the rate will not change more than twice a year. The current rate is 3.9%. You’ll be told if this is going to change.
Interest will be added every year until the loan is completely repaid or written off.
If you die before you’ve paid off your SMI loan, it will not need to be repaid if your home is left to a surviving partner. The loan will need to be repaid if your home is left to anyone else or it’s sold.
If you finish paying your mortgage, you will not need to repay your SMI loan unless you sell or transfer ownership of your home.
Selling your home
You will not be asked to sell your home in order to repay your SMI loan.
If you sell your home, you’ll repay the SMI loan from what’s left after you pay:
- your mortgage
- any other loans secured against your home before you started getting SMI, including home improvement loans
If you do not have enough left to pay off all of the SMI loan, you will have to pay back what you can. The rest of the loan will be written off.
Example 1
You sell your property for £95,000.
You have £35,000 of your mortgage left to pay and you owe £4,500 for your SMI loan.
You’ll be left with £55,500 after repaying your mortgage and SMI loan.
Example 2
You sell your property for £80,000.
You have £71,000 left to pay in your mortgage and you owe £9,600 for your SMI loan.
After repaying your mortgage you only have enough money to pay back £9,000 of your SMI loan. The remaining £600 will be written off and you do not have to repay it.
If you’re buying a new home
You may be able to transfer the loan to your new home. Contact DWP Loan Management as soon as you know you intend to move, and before you complete your sale.
DWP Loan Management
Telephone: 0800 916 0567
Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 916 0567
Monday to Friday, 8am to 6pm
Find out about call charges
SMI Loan Management
Post Handling Site A
Wolverhampton
WV98 2DS
You’ll need to give DWP Loan Management your solicitor’s contact details. They will work with your solicitor to arrange for the loan to be moved to your new home.
The office paying your qualifying benefit will also check you’re still eligible.
Voluntary repayments
If you want to pay the loan back more quickly, you can also make voluntary repayments. The minimum voluntary repayment is £100 or the outstanding balance if it’s less than £100.
How to repay
Contact DWP Loan Repayment to ask for a ‘settlement letter’ - this will tell you how much you need to pay.
You can pay by telephone or online banking using the bank account details in your settlement letter.
DWP Loan Repayment
Telephone: 0800 916 0567
Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 916 0567
Monday to Friday, 8am to 6pm
Find out about call charges