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Homeowner housing costs

Key information

Homeowners who are in receipt of certain benefits may qualify for help towards their housing costs, including mortgage interest, as part of their benefit claim.

Applies to: England, Scotland, Wales, Northern Ireland

Administered by: Department for Work and Pensions



You can read through this information sheet, or go directly to the sections you want to read by clicking on these links:

Who does it help?

Homeowners who are entitled to one of the following benefits:

If you are in receipt of one of these benefits an amount of money could be included in your award to help with housing costs for the home you live in such as the interest payments on mortgages and on other loans for home purchase, certain repairs, and home improvements. It can also cover other housing costs including ground rent and service charges in some circumstances.

If you only qualify for contributory Jobseeker’s Allowance or contributory Employment and Support Allowance you will not have housing costs included as part of your claim.

In most cases, people who rent their home cannot get help with housing costs in this way. Instead, they should claim Housing Benefit (HB England, Scotland and Wales and HB Northern Ireland).

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How much does it pay?

Housing costs for loans, whether that is a mortgage, home purchase loan, or qualifying home improvement loan, are calculated using a standard rate of interest, not your lender’s actual interest rate for your loan. This means that if your interest rate is higher, there may be a shortfall between the help provided and your contractual payment.

The current rate of interest used when calculating help with housing costs is 3.63%, equal to the Bank of England’s monthly average mortgage interest rate on 31 August 2010. This standard interest rate has applied since 1 October 2010 and will only change again if the Bank of England rate differs from it by 0.5% or more.

There are also restrictions on the help provided if your mortgage or loan was taken out or increased after you became entitled to IS, income based JSA, income related ESA or PC, or if your housing costs are deemed excessive.

In most cases there is also an upper limit on the total loan amount that can be included in your claim. The upper loan limit is £200,000 if you claimed IS, income based JSA and income related ESA after January 2009 and £100,000 in other cases.

The Turn2us Benefits Calculator can calculate how much you may be entitled to.

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Is there a waiting period?

If you are making a new claim for IS, income based JSA and income related ESA, you will not qualify for help with housing costs for the first 13 weeks of your claim. If you are claiming PC, no waiting period applies.

If you are transferring from one benefit to another, a longer waiting period may apply (if you are not already receiving help with mortgage interest).

If you are in this position, seek advice. You can use the Turn2us Find an Adviser tool to find a local adviser.

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Is there a time limit on the help available?

If you claimed income based JSA after January 2009, help with mortgage interest is generally only available for 104 weeks.

There are no time limits if you are getting IS, ESA or PC.

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How do I make a claim?

Help with housing costs forms part of the claim for IS, income-based JSA, income-related ESA or PC. You will be asked to provide details of your housing costs during the process so no separate claim is required.

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How is the payment made?

The payment is usually made direct to the lender.

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Mortgage Interest run-on

If you or your partner enter full time employment, you might qualify for mortgage interest run-on, even though your entitlement to IS, income-based JSA or income-related ESA will stop. If you qualify you will receive help with housing costs for a run-on period of four weeks - this will be paid as part of IS no matter what benefit you were previously in receipt of. You don't have to make a claim, it will be paid automatically once you let jobcentre plus know you are starting full time work.

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Further help

Some of the rules and calculations described in this information sheet are very complicated and we recommend that you seek further advice on your particular situation. You can use the Find an Adviser tool on our website to find a local benefits adviser.

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Last updated: 11 January 2015

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