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Buying a house using Support for Mortgage Interest

This page has technical information about Support for Mortgage Interest (SMI). This is a way a disabled person can buy a property with the help of additional Income Support payments.Income support can meet the interest payments on a mortgage up to £200,000. Property for sale on the open market can be purchased outright but more commonly SMI is used to buy part of a property being sold by a housing association offering shared ownership. Look in Housing and support options in the left-hand column to find fact sheets about shared ownership.

One reason for SMI being linked to shared ownership is that until January 2009 the maximum loan limit was
£100,000. In most areas this was insufficient to buy a suitable property outright but it would allow for example, thepurchase of a half share of a £200,000 property, so was more affordable.

How to access

Obtaining SMI is dependent on meeting the criteria set out in Schedule 3 of the General Income SupportRegulations (paragraph 4, sub-paragraph 9).

In essence this says:

'Housing cost shall be met in any case where the loan was taken out, or an existing loan increased, to acquire
alternative accommodation more suited to the special needs of a disabled person than the accommodation which
was occupied before the acquisition by the claimant'.
(Ownership series – number 15)

The criteria are:
  • The owner must be disabled – the test is eligibility for a disability based benefit. You need to be on DLA
  • and one or more of: Income Support, Incapacity Benefit, Severe Disablement Allowance, Pensions Credit,
  • income-based Employment and Support Allowance or income-based Job Seekers Allowance
  • Eligible for an income based benefit (i.e. Income Support, minimum guarantee Pension Credit, income-
  • based Employment and Support Allowance or income-based Job Seekers Allowance) once your eligible
  • housing costs have been taken into account
  • Require alternative accommodation more suited to the special needs of a disabled person
  • There is no check list of what meets the test of needing alternative accommodation. A wide range of
  • circumstances can, in practice, make it necessary to move including:
  • A care home closing
  • Living with older parents (or other relatives) no longer able to provide the necessary support, or death of
  • a carer
  • Breakdown of care or living arrangements
  • Leaving a special residential school
  • A care assessment detailing why a move is required is helpful. Note that SMI cannot be used to buy the property
  • a person is currently living in as this does not meet the test of needing alternative accommodation.

Pros and cons

The pros and cons are essentially those of any other owner.


  • SMI permits a disabled person to acquire a property of their choice, subject to the limit of the loan ñ
  • usually £200,000
  • Security of tenure††
  • All the benefits of ownership including possible effect on status, self-esteem, ability to choose life-style,
  • who share with (if anyone), adapt as wish...
  • Makes ownership or shared ownership affordable in a wide range of circumstances.


  • Although in principle a person may meet the criteria for SMI in practice it may be difficult to get a
  • mortgage
  • Complex process to apply for both SMI and mortgage – support likely to be required
  • Ignorance of option still widespread
  • SMI only pays interest, does not repay capital on mortgage
  • As with most other ownership options some arrangement for meeting the day to day and longer term
  • costs of property maintenance is required
  • As with most other ownership routes, some money will be required to meet the legal, survey and other
  • fees and expenses involved in purchase. There are no special benefits for these. Funding for adaptations
  • may also be required
  • There is a two year limit on SMI eligibility for people receiving income-based Job Seekers Allowance
  • For someone who hopes to take up paid employment, using SMI cannot be recommended. This is
  • because they are likely to lose SMI and unless their job is reasonably well paid so they can afford the
  • mortgage repayments from earnings they risk losing their home. Work and housing need to be planned
  • together and expert advice is required
  • Before entering into this arrangement the disabled person needs to obtain welfare rights advice so that
  • they are clear about how this arrangement may impact on their entitlement to state benefits e.g. if they
  • moved into paid employment
  • Support for Mortgage Interest is not a guaranteed source of income and can be subject to change. It is
  • important that further advice is taken from your benefit advisor and/or financial advisor. 

How the money works

The process is usually to:

  • Establish that in principle the Department of Work and Pensions (DWP) will meet the interest payments
  • on a mortgage.
  • Find a suitable property within the loan limitations
  • Obtain an offer of a mortgage
  • Negotiate for property and complete purchase
  • In practice because SMI only repays interest and not the capital element on a loan usually an interest only
  • mortgage is taken out. There are very few lenders willing to provide:
  • A 100% mortgage
  • Interest only
  • To someone intending to use SMI to pay the interest
  • Even fewer also willing to lend on shared ownership property.

In addition, lenders may be concerned about the legal capacity of some people with a learning disability to enter
into an enforceable contract.

As a result, although it is possible for individuals, with some support, to arrange matters themselves it is more
common to use an intermediary that specialises in obtaining mortgages. The leading mortgage experts who
specialise in working with disabled people are My Safe Home.

Note that the capital is ultimately repaid when the property is eventually resold. Some mortgage providers offer
loans for up to 45 years for this market. Some families make provision in their wills or in some other way to repay
the capital.

Other issues

Ownership possibilities are described in other fact sheets on this website. SMI may be used to finance many of these. A book 'Ownership Options' provides considerable detail - available through this website. 

If legal capacity is an issue there are various ways this can be dealt with. It does not have to prevent house
purchase where in all the circumstances this option is in the individualís best interest. In extremis a Deputy can be appointed under the Mental Capacity Act 2005.
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Learning Disability England
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Learning Disability England
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