Support for Mortgage Interest after a death: who has to repay it

The short answer

Support for Mortgage Interest (SMI) is not the same benefit it used to be. Since April 2018, it has been paid as a loan from the Department for Work and Pensions, secured against the home, rather than a non-repayable benefit. That change matters enormously after a death, because it means SMI does not simply stop and disappear the way most benefits do – it becomes a debt that someone may have to settle.

What happens next depends entirely on who inherits the property:

Situation	What happens to the SMI loan
A surviving partner inherits the home and lives there	The loan can usually continue. No immediate repayment is required, but interest keeps building until it’s eventually repaid.
Anyone else inherits the home (adult child, other relative, friend)	The loan must be repaid immediately – either by selling the property or from other money.
The property is sold as part of the estate	The loan is repaid from the sale proceeds, after the mortgage and any other secured loans that pre-date the SMI loan.
Sale proceeds aren’t enough to cover it	The shortfall is written off, not chased from other estate assets.

If the person who died was getting help with their mortgage and you’re now dealing with the estate or wondering whether you can stay in the house, this guide walks through what the DWP will expect and when.

What Support for Mortgage Interest is

SMI helps people on certain benefits cover the interest on their mortgage or a loan taken out for essential home repairs. It does not pay off any of the capital you owe your lender, and it isn’t paid at all if you have no mortgage or loan.

The important detail for bereavement purposes: since April 2018, SMI has been a loan, not a benefit payment. Before that date it was paid as a straightforward benefit with nothing to repay. If a family member has talked about “getting help with the mortgage from the DWP” for many years, they may be thinking of the old system – but anyone claiming since 2018 has been taking on a loan secured against their home, whether or not they thought of it that way at the time.

The loan is calculated using a standard interest rate set by the DWP, currently 3.66%, applied to the mortgage balance up to a capital limit of £200,000 (or £100,000 if you’re on Pension Credit or were claiming certain benefits before January 2009 while under State Pension age). This calculation rate is separate from the rate charged on the loan itself while it sits unpaid – more on that below. (Source: gov.uk – What you’ll get)

Who was eligible

SMI is paid to people receiving one of three qualifying benefits:

Income-related Employment and Support Allowance
Universal Credit
Pension Credit

Pension Credit claimants can get SMI from the day their Pension Credit starts. Universal Credit claimants usually wait 3 months of continuous receipt first. Income-based ESA claimants wait 39 weeks. (Source: gov.uk – Eligibility)

Because Pension Credit is the fastest route to SMI and has no age cap on when a claim can start, SMI loans are common among older claimants – which means executors and surviving partners dealing with an estate are often unaware a mortgage-interest loan exists at all until the DWP or a solicitor raises it.

What happens to the loan when the claimant dies

If a partner inherits the home

If you inherit the home from your partner and continue living there, you’ll usually be able to inherit the SMI loan along with it. You do not need to repay it immediately. Interest continues to be added to the loan until it is eventually repaid – for example, when you later sell the property, or when the loan is repaid from your own estate after you die. (Source: gov.uk – Repaying your loan)

This is the one scenario where nothing urgent needs to happen. You do not need to find a lump sum, and the DWP does not require repayment simply because the original claimant has died – only because of what happens to the property afterwards.

If anyone else inherits the home

If the property passes to someone other than a surviving partner – an adult child, another relative, a friend, anyone named in the will or entitled under intestacy – the loan must be repaid immediately. It can be repaid by selling the home or by using other money from the estate. (Source: gov.uk – Repaying your loan)

In practice, this means an executor cannot simply transfer the property into a beneficiary’s name and carry on as before. The SMI loan needs to be identified, its outstanding balance confirmed with the DWP, and a repayment plan agreed before or as part of the transfer.

If the property is sold

When the home is sold, the SMI loan is one of the last debts paid from the proceeds: it comes after the main mortgage and any other loans secured against the property that were taken out before the SMI loan started. If what’s left doesn’t stretch far enough to cover it, the remaining balance is written off. (Source: gov.uk – Repaying your loan)

The interest rate on the outstanding loan

Once an SMI loan exists, interest is charged on the unpaid balance at a separate rate from the one used to calculate the original payments – currently 4.5%, reviewed and changed no more than twice a year. (Source: gov.uk – Repaying your loan) This is the figure that matters if a surviving partner is inheriting the loan and wants to understand how quickly the balance will grow while it remains unpaid.

What you need to do

Step	What to do
1. Report the death	Use Tell Us Once where possible, or contact the DWP department that was paying the qualifying benefit (Pension Credit, Universal Credit, or ESA) directly. SMI itself is administered alongside whichever benefit triggered it, so reporting the underlying benefit death stops that payment and flags the mortgage interest loan for review.
2. Find out if an SMI loan exists	Check the deceased's benefit award letters, or ask the DWP directly, since an SMI loan won't necessarily be obvious from a bank statement – it's paid to the lender, not the claimant.
3. Establish who inherits the property	Check the will, or the intestacy rules if there's no will. This determines which of the scenarios above applies.
4. If a partner is inheriting and staying	Contact the DWP to arrange for the loan to continue in the surviving partner's name. No immediate repayment is due, but get written confirmation of the outstanding balance for your records.
5. If anyone else is inheriting, or the property is being sold	Get the exact SMI balance from the DWP before completing any transfer or sale, so the executor can settle it from sale proceeds or other estate funds as part of administering the estate.
6. Keep the mortgage lender informed throughout	The mortgage itself is a separate matter from the SMI loan – see our guide on what happens to a mortgage when someone dies for how to handle the underlying mortgage alongside the SMI loan.

How SMI fits with the rest of the estate

An SMI loan is a secured debt, similar in principle to the mortgage itself, and it needs to be accounted for when valuing the estate for probate. If you’re applying for probate or working out whether probate is even needed, the outstanding SMI balance is a liability that reduces the net value of the estate, in the same way an outstanding mortgage does. Get the confirmed balance from the DWP in writing before finalising estate accounts.

If the surviving partner is inheriting the loan and continuing to live in the property, this doesn’t need to be settled through probate immediately – it becomes an ongoing arrangement between the DWP and the surviving partner, much like an inherited mortgage.

Common questions

Is SMI the same as the old mortgage interest benefit some people remember?

No. Before April 2018, help with mortgage interest was paid as a non-repayable benefit. Since then, it has been paid as a loan secured against the home. If the person who died had been claiming continuously since before 2018, part of what they received may still fall under older rules, but any SMI paid since April 2018 is a loan that needs to be accounted for as described above. Check with the DWP for the exact position on a long-running claim.

Does the surviving partner have to keep making payments?

No ongoing repayments are required from a surviving partner who inherits the loan and stays in the property. Interest simply continues to accrue on the balance until it’s eventually repaid, typically when the property is later sold.

What if the surviving partner wasn’t married to the person who died?

Gov.uk’s own wording on inheriting the loan refers simply to a “partner” inheriting the home, not a spouse or civil partner specifically, so an unmarried partner who inherits the property should be able to carry the loan forward on the same basis. Confirm this directly with the DWP when you report the death, since it’s the underlying qualifying benefit (Pension Credit, Universal Credit, or ESA), not the SMI loan itself, that has separate eligibility rules for couples.

Can the DWP take the SMI loan from other assets in the estate, not just the property?

No. Repayment comes from the property itself, whether through sale proceeds or the surviving partner’s later repayment. If those proceeds fall short, gov.uk confirms the remainder is written off rather than pursued from the rest of the estate.

Do we need to tell the DWP separately from Tell Us Once?

Tell Us Once notifies DWP benefit departments of the death, which should flag the SMI loan for review, but because SMI is tied to a specific award (Pension Credit, Universal Credit, or ESA), it’s worth confirming directly with the DWP that the SMI loan itself has been picked up, rather than assuming the general Tell Us Once notification alone is sufficient for a secured loan of this kind.

Summary

Support for Mortgage Interest changed from a benefit to a loan in April 2018, and that change is what makes it different from every other benefit covered in this guide when someone dies. A surviving partner who inherits the home can usually carry the loan forward without repaying it straight away. Anyone else who inherits, or if the home is sold, triggers immediate repayment from the proceeds – with any shortfall written off rather than chased. Confirm the outstanding balance with the DWP in writing as early as possible, since it affects both the estate’s value for probate and what a surviving partner can expect to owe in the future.

Sources

Last verified September 2026.