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
Age rules: The age rules are the same as those
for the benefit you are claiming
Administered by: Department for Work and
Pensions
Index
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:
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.
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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What help does it provide?
A claim for the benefits mentioned above can include help
towards 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.
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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 which housing costs will be paid towards. The upper loan
limit is £200,000 for those who claimed IS, income based JSA
and income related ESA after January 2009 and
£100,000 in other cases.
The Turn2us Benefits Checker can calculate
how much you may be entitled to.
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Is there a waiting period?
For IS, income based JSA and income related ESA, if
you qualify for help with housing costs there may still be a
‘waiting period’ of 13, 26 or 39 weeks before this help is
provided. For those claiming PC, no waiting period
applies.
- 13 weeks: For first claims made after 4
January 2009; or where there has been a gap between a previous and
current claim and you haven’t qualified for the 13 week waiting
period before.
For those who don't qualify for the 13 week waiting period, it
will depend on when their loan was taken out. If you are in this
position seek advice.
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Is there a time limit on the help available?
For those who claimed income based JSA after January 2009 and
who get help on a loan up to £200,000, help with
housing costs 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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Date of publication: 8 July 2011
Turn2us - to access benefits & grants.
