SMI is paid as a loan but, unlike most loans, you don’t make monthly repayments so it shouldn’t affect your day-to-day budgeting.
The loan payments are secured on your home at an interest rate of 1.3%. This rate may change on 1 January and 1 July every year.
You’ll only need to repay the loan and interest when you:
- sell the property, or
- transfer ownership of the property to someone else.
If there’s isn’t enough money from the sale of your home to repay the SMI loan in full, the rest of the loan will be written off and you won’t have to repay it.
If you sell your home and buy somewhere new, you can ask for any loan balance to be transferred to your new home.
You can also choose to pay money back at any time. The minimum amount you can pay back is £100. Contact DWP Loan Repayment – 0800 916 0567 if you want to find out more about doing this.
You can ask to stop getting SMI loan payments at any time.