Universal Credit (UC): How much will I get? I'm a homeowner
Maximum loan amount
There is an upper limit on the total loan amount that can be included in your claim. The upper loan limit is £200,000. Your housing costs element will therefore be based on your total loan amount owed, or £200,000, whichever is lowest.
Standard Interest rate
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.
Your housing costs element will be your loan amount owed (or £200,000) multiplied by the standard interest rate, divided by twelve in order to get the monthly amount.
There are restrictions on the help provided if your mortgage or loan was taken out or increased after you became entitled to Universal Credit, or if your housing costs are deemed excessive.
You will not receive a housing costs element for the first three months after qualifying to have one included in your award. This is called a 'qualifying period'.
If you were receiving Jobseeker's Allowance or Employment and Support Allowance immediately prior to your Universal Credit claim, the time spent on that benefit can count towards your qualifying period.