Can I claim Universal Credit if I own my house?

Yes, homeowners can claim Universal Credit if they meet the eligibility criteria. Your main home is not counted as capital. However, UC does not pay your mortgage directly — instead, you may be eligible for Support for Mortgage Interest (SMI), which is a loan, not a grant.

Does Universal Credit pay my mortgage?

Universal Credit does not pay your mortgage. You may qualify for Support for Mortgage Interest (SMI), which pays the interest portion of your mortgage only (not capital repayment). SMI is now a loan that must be repaid when you sell your home, and there's a 9-month waiting period.

What is Support for Mortgage Interest (SMI)?

SMI is a government loan that helps pay the interest on your mortgage while you're on UC. It covers interest only, not capital. There's a 9-month waiting period before payments start. The loan is secured against your home and must be repaid when you sell or transfer ownership.

How long do I wait for mortgage help on Universal Credit?

Support for Mortgage Interest has a 9-month waiting period (3 months for pension credit claimants). During this time, you must cover your full mortgage payments yourself. Contact your lender early to discuss options like payment holidays or reduced payments.

Will I have to sell my house to get Universal Credit?

No. Your main home is disregarded as capital for Universal Credit purposes. You won't be forced to sell to claim UC. However, second homes or investment properties are counted as capital and could affect your eligibility if their value pushes you over £16,000.

Can I Get Universal Credit If I Own My House? — Homeowner's Guide | PocketWise

Homeowners can claim Universal Credit, but the help available is different from renters. This guide explains everything you need to know.

UC and Homeownership — Key Facts

Fact	Detail
Can homeowners claim UC?	Yes — if you meet normal eligibility rules
Is your home counted as capital?	No — main home is disregarded
Does UC pay your mortgage?	No — but SMI may help with interest
How much help?	SMI covers mortgage interest only
When does help start?	After 9-month waiting period
Is it free?	No — SMI is a loan, not a grant

Support for Mortgage Interest (SMI)

SMI is the only direct housing help available to homeowners on UC.

What SMI Covers

Covered	Not Covered
Mortgage interest	Capital repayment
Loan interest (for home purchase)	Building insurance
Second charge mortgage interest	Endowment premiums
Equity release interest (some)	Ground rent
Home improvement loan interest	Service charges
	Payment protection insurance

SMI Rates 2025/26

Aspect	Detail
Interest rate used	Standard rate (set by government)
Current standard rate	2.09% (July 2025)
Maximum loan covered	£200,000
Rate review	Quarterly

How SMI Is Calculated

Step	Example
Your mortgage balance	£150,000
SMI standard rate	2.09%
Annual interest	£3,135
Monthly SMI payment	£261.25

Important: If your actual mortgage rate is higher than 2.09%, you must pay the difference yourself.

SMI Calculation Examples

Mortgage Balance	SMI Rate	Monthly SMI Payment
£50,000	2.09%	£87.08
£100,000	2.09%	£174.17
£150,000	2.09%	£261.25
£200,000	2.09%	£348.33
£250,000	2.09% (max £200k)	£348.33

The 9-Month Waiting Period

Waiting Period Rules

Claimant Type	Waiting Period
Working age (most people)	9 months
Pension Credit claimant	3 months
Getting UC after Pension Credit	3 months

During the Waiting Period

What Happens	Detail
Your mortgage	You must pay in full
Options	Payment holiday, interest-only, reduced payments
Contact lender	Essential — explain your situation
FCA protection	Lenders should offer forbearance

Surviving the 9-Month Wait

Strategy	How It Helps
Payment holiday	Lender may agree to 3-6 months
Interest-only	Reduces payment (temporarily)
Extend mortgage term	Reduces monthly payment
Capitalise arrears	Adds missed payments to loan
Use savings	If you have them
Ask for hardship help	Some lenders have support funds

SMI as a Loan

Since April 2018, SMI is a loan secured against your home.

SMI Loan Terms

Term	Detail
Interest rate on loan	Matches gilt rate (low)
Current loan interest	Around 1%
When repaid	When you sell/transfer home
Can you pay early?	Yes, if you wish
What if home worth less than loan?	Remaining debt may be written off

SMI Loan Example

Detail	Amount
SMI received over 3 years	£9,400
Interest on SMI loan	£280
Total to repay	£9,680
When	At sale of property

When SMI Loan Must Be Repaid

Event	Loan Repayment
You sell your home	Repaid from sale proceeds
You transfer ownership	Repaid from proceeds
You die	Repaid from estate
Partner inherits	Can be deferred or transferred

Claiming SMI

Eligibility Requirements

Requirement	Detail
Be receiving UC	Including zero UC (passport claim)
Have a mortgage on your home	The property must be where you live
Have equity in your home	SMI is a secured loan
Accept loan terms	You must agree to repay
Complete 9-month wait	No payment before this

How to Apply

Step	Action
1	Claim UC as normal
2	Declare you’re a homeowner
3	Provide mortgage details
4	DWP contacts your lender
5	After 9 months, decide if you want SMI
6	Accept or decline the loan

Documents Needed

Document	Why
Mortgage statement	Confirms balance and payments
Proof of interest rate	May be requested
Property value estimate	To confirm equity
Mortgage offer	May be requested

What UC Does and Doesn’t Pay

Housing Cost	Renter	Homeowner
Rent	Housing element pays	N/A
Mortgage interest	N/A	SMI loan (after 9 months)
Mortgage capital	N/A	You pay
Service charges (rent)	Part of housing element	Not covered
Service charges (owned)	N/A	You pay
Ground rent	N/A	You pay
Building insurance	N/A	You pay
Council Tax	Not covered by UC	Not covered by UC

Your Home and Capital Rules

Main Home — Not Counted

Situation	Your Home Counted?
You live there	No
Temporarily away (hospital, care)	No
Trying to sell	No (for 6 months)
Empty while you’re in prison	Depends on sentence length
Partner lives there, you elsewhere	No

Second Properties — Counted

Property	Treatment
Buy-to-let	Equity counted as capital
Holiday home	Full value counted
Inherited property	Value counted
Property abroad	Value counted
Land	Value counted

Example: Second Home Impact

Asset	Value
Second property value	£120,000
Mortgage on second property	£60,000
Equity (capital)	£60,000
Effect on UC	Capital over £16,000 — no UC

If You Can’t Pay Your Mortgage

Steps to Take

Step	Action
1	Contact lender immediately
2	Request payment holiday or forbearance
3	Apply for UC if not already claiming
4	Ask about interest-only switch
5	Seek debt advice (StepChange, Citizens Advice)
6	Consider all options before selling

Lender Options

Option	How It Works
Payment holiday	3-6 months of no payments
Interest-only period	Pay interest only temporarily
Reduced payments	Partial payment agreed
Extended term	Spreads remaining loan over longer period
Capitalise arrears	Add missed payments to loan
Mortgage modification	Permanent change to terms

If Repossession Threatens

Protection	Detail
Pre-action protocol	Lender should offer alternatives first
Court process	Takes several months
Time to find solutions	Courts prefer to avoid repossession
Mortgage rescue schemes	Some local authorities offer help
Debt advice	Free help available

Renting Out Rooms

Rent a Room Scheme and UC

Rule	Detail
Rental income	Counts as income, reduces UC
Rent a Room tax allowance	Doesn’t affect UC calculation
First £7,500 tax-free	Still counted for UC
Non-dependant deductions	May apply if adult family member

Example: Lodger Income

Detail	Amount
Lodger pays	£500/month
Effect on UC	£275 reduction (55% taper)
Net benefit	£225 extra income

Shared Ownership Homes

How SMI Works with Shared Ownership

Component	Help Available
Your owned share (mortgage)	SMI may help with interest
Housing association share (rent)	Housing element pays
Combined approach	Both may apply

Shared Ownership Example

Detail	Amount
50% owned share mortgage	£100,000
50% rented share rent	£400/month
SMI (interest portion)	£174.17/month
Housing element (rent)	Up to £400/month

Help with Council Tax

Scheme	Detail
Council Tax Support	Separate from UC
Apply to local council	Not automatic with UC
Reduction varies	Depends on your area
Can reduce bill by	Up to 100%

Alternative Help

If SMI doesn’t cover enough, consider:

Option	Detail
Local welfare assistance	One-off council grants
Discretionary Housing Payments	Usually for renters, but ask
Charitable help	Turn2Us grants database
Mortgage payment protection insurance	If you have it
Family support	Informal help

Key Dates and Timelines

Event	Timeline
Apply for UC	Day 1
Assessment period starts	Day 1
First UC payment	Around 5 weeks
SMI waiting period	9 months from UC start
SMI payments begin	Month 10
Ongoing	SMI paid monthly