Real estate societies and financial institutions are calling on ministers in the UK to provide more support for residents who are struggling to meet up with mortgage payments due to the financial impact of the coronavirus pandemic.

One scheme introduced by the government to help with mortgage repayment is the Support for Mortgage Interest (SMI). This is a loan that is made available to select individuals in the UK and repaid after their property has been sold.

However, to qualify for this program, applicants would need to wait for nearly 40 weeks after losing their primary source of income before making a claim. This waiting period has been debated by several banks who now want the waiting period reduced to 13 weeks, due to the financial crisis brought about by the pandemic.

In response, the government is advising citizens to seek support from their lenders first if they’re struggling to meet up with their mortgage payments, after viewing their printable amortisation schedules. These lenders are obligated to support them during this time, pending government intervention.

For almost 70 years, SMI has always been paid as a benefit to those who are out of jobs and need to finance their mortgage but in 2018, the government made it a loan. Now, you would need to pay it back with interest when the owner’s house has been sold—which typically occurs when they pass away.

Changing SMI from being a benefit to becoming a loan was a highly controversial decision, yet it has remained a good form of support particularly for those who have unemployed for a long time. To be eligible for this loan, you would need to have a maximum mortgage of £100,000 and £200,000 for pensioners and working-age claimants respectively.

The loan is paid directly to their lenders and even those with poor credit history can lay claim to these funds. However, claimants need to already be on one of a range of other government benefits including universal credit or unemployment allowance.

Two major issues are being positioned by banks and building societies, one of which is the long waiting period before anyone can qualify for the loan.

“The wait time and eligibility criteria for Support for Mortgage Interest is preventing much-needed help going to struggling homeowners when they need it most – before their financial circumstances get worse and mortgage arrears start building up,” said Charles Roe, director of mortgages at banking trade body UK Finance in a report.

Also, the second problem is that those on universal credit cannot qualify for SMI if they are involved in any type of paid employment—even a few hours of work would set them back by nine months. Lenders are clamoring for this rule to be changed so people work for as much as 16 hours weekly without any negative impact on their SMI claim.

The government has reiterated its commitment to supporting people get through the drastic impact of the pandemic but equally reminded both the building societies and banks of their obligations—which is to provide the required support to borrowers or anyone facing financial difficulties, according to a spokesperson for the Department for Work and Pensions (DWP). However, lenders have argued that any further support would not benefit borrowers, since it would merely extend the payment period and not alleviate it.

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