The linear stability of the 'Scrape-off-Layer" (SOL) with respect to interchange-type modes is studied using the reduced MHD model and applying a ballooning approximation to the perturbations. 'Line-tying' boundary conditions are used at the target plates. Employing a metric determined by the magnetic field geometry, the influence of the X-point on stability is assessed. The effect of relevant parameters like X-point height, magnetic shear, and plasma shaping is qualitively determined. It is demonstrated that the calculations for experimental configurations and those based on an analytical equilibrium model yield good qualitative agreement. It is shown that the SOL plasma just outside the separatrix can become unstable more easily (i.e. for lower pressure gradients) than the plasma just inside the separatrix where the magnetic well is stabilising. This finding is used to propose a model for the occurrence of giant ELMs. The interchange instability in the SOL acts as a precursor and is mainly localised near the X-point, but may also have a strong signature just above the outer midplane. The model provides a natural explanation for the occurrence of three different time scales in a giant ELM, and an estimate for the ELM repetition time is given. The scaling of the repetition time with power and current is shown to agree with experimental results.