Lenders will offer borrowers facing arrears and repossession the chance to take part in the Government’s Homeowner Mortgage Support Scheme. The scheme allows borrowers who have suffered temporary loss of earnings the chance to defer 70 per cent of their mortgage repayment for two years.
Eligible borrowers must have bought their home before December 1, 2008, have an outstanding mortgage of less than £400,000, and savings of less than £16,000. They should also have a regular household income and be able to make a minimum contribution of 30 per cent of the total interest payment.
Housing minister Margaret Beckett MP says: “We know that many families are worried about how to pay the mortgage right now, and we’re determined to ensure there is real help available for them.
“On top of the range of measures we’ve already put in place, this new support will help borrowers who just need a bit more time to get themselves back on their feet.”
Nationalised lenders Northern Rock and Bradford & Bingley have signed up to the scheme, as have part-nationalised banks Lloyds Banking Group and Royal Bank of Scotland.
Clydesdale, Yorkshire Bank and Cumberland building society will also offer the scheme.HSBC, Barclays, Nationwide, and Santander will not offer the HMSS, but will offer similar schemes to struggling borrowers.
Northern Rock chief executive Gary Hoffman says: “We are fully committed to a successful launch of the Homeowner Mortgage Support Scheme as an additional tool to help customers who are facing financial difficulty to remain in their home.
“At Northern Rock we are committed to working with all our customers and to assist those who may be under pressure financially, providing the best possible service we can in all circumstances.”
Building Societies Association head of mortgage policy Paul Broadhead has assured mutual members that the BSA’s Customer Commitment will offer just as much as the HMSS.
He says: “Borrowers should have every confidence that, if they are a customer of a building society, the Customer Commitment means they will receive at least as much help as is available under the HMSS. This further confirms the building society sector’s commitment to borrowers in difficulty.”