Managed payments to mortgage lenders – information for lenders
Updated 1 August 2023
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Certain income-related benefits can include help towards mortgage interest payments for homeowners through Support for Mortgage Interest (SMI). We normally make SMI payments direct to the lender.
We call the process of paying mortgage interest direct to lenders ‘managed payments to mortgage lenders’ (formerly Mortgage Interest Direct).
1. How lenders take part in the scheme
Lenders must be registered with the Benefit Payment Systems Group at the Department for Work and Pensions to take part in the scheme.
To opt out of the scheme, a lender must contact the Benefit Payment Systems Group. An opt out request received between 1 February and 1 April will take effect from 1 April in the next calendar year. A request received at any other time will take effect from the 1 April following the date of receipt. Similar arrangements apply to requests to rejoin after opting out.
A benefit claimant whose lender opts out of the scheme will get their housing costs included in their benefit payment. The claimant will be responsible for paying this to their lender.
Qualifying lenders may contact the Benefit Payment Systems Group to:
- join or opt out of the scheme
- amend the information DWP holds about them
Benefit Payment Systems Group
SMI Team
Peel Park Phase 2
Red zone First Floor
East Wing
Brunel Way
Blackpool
FY4 5ES
Email: BLS.MP2MLTEAM@DWP.GOV.UK
2. More information
The Social Security (Mortgage Interest Payments) Act 1992 permits direct payments of mortgage interest to be made from income-related benefits.
The Social Security Claims and Payment Regulations 1987 deals with the mortgage interest direct scheme – see Regulations 34A and 34B and Schedule 9A. The definition of a qualifying lender in Schedule 9A includes “any body incorporated under the Companies Act 1985 whose main objects include the making of loans secured by a mortgage of or a charge over land or (in Scotland) by a heritable security”.
We provide guidance on the scheme for DWP staff in the Decision makers’ guide – Volume 6, Chapter 33.