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Wednesday, 3 October 2023

Mortgage Rescue scheme

The Mortgage Rescue scheme may help if you are having serious difficulties making your mortgage repayments and are in danger of becoming homeless if repossessed. Find out if you are eligible for help to stay in your home and how the scheme works.

What is the Mortgage Rescue scheme?

The Mortgage Rescue scheme is a government scheme. It's run by your local housing authority - the organisation that manages housing for your council.

If you're eligible, you could get financial help to stay in your home. You make your application for help from the scheme to your local council.

The Mortgage Rescue scheme is only available in England. Separate schemes are either in place, or being developed, in Scotland, Wales and Northern Ireland. Search your local council’s website for more information about these schemes.

Who can get help from the Mortgage Rescue scheme?

To be eligible for the scheme your household must include someone in 'priority need'. This could be:

  • a pregnant woman
  • someone with dependent children
  • someone who is vulnerable because of old age or a physical or mental impairment

You’ll also need to meet the following criteria:

  • your household earns less than £60,000 a year
  • you don’t own a second home, including a home abroad
  • the value of your mortgage (and any loans taken out against your home) is less than 120 per cent of the value of your home
  • the value of your home isn’t higher than certain levels set for each region – ask your council about the level for your area

When you apply for the scheme, your local housing authority will talk you through some other criteria that you’ll need to meet.

How the Mortgage Rescue scheme works

You can be referred to the scheme by:

  • advice agencies, like the Citizens Advice Bureau or Shelter
  • your mortgage lender
  • the courts

You can also contact your local council directly to get advice about the Mortgage Rescue scheme.

When you apply for help from the scheme:

  1. the council will arrange for you to meet with a money adviser, if you haven’t already seen one
  2. you’ll get advice and a plan to help you manage your debt or some other way that you can meet your housing costs
  3. the council may arrange an assessment of your home
  4. you may get financial help, either with an ‘equity loan’ or through ‘Government mortgage to rent’, depending on your circumstances
  5. the council will involve a Registered Social Landlord (RSL) - an independent housing organisation registered with the Tenant Services Authority

Equity loan

The RSL can provide an interest-only loan, which you can use to pay off some or all of your mortgage or secured loans, allowing your monthly repayments to be reduced to an affordable level. You’ll need to have no more 40 per cent equity in your property to qualify for an equity loan.

Government mortgage to rent

The RSL will buy your home for 90 per cent of its market value. You’ll stay in your home and pay rent to the RSL as a tenant. The rent will be 20 per cent less than the market rate for your area.

You’ll continue to receive advice after you have entered the scheme to help you manage your finances.

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