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Mortgage support scheme begins

Mortgage support scheme begins

Category: Mortgages

Updated: 21/04/2009
First Published: 21/04/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Homeowners who fall on hard times will be able to defer a large proportion of their mortgage repayments under a new scheme.

The Homeowners Mortgage Support Scheme (HMSS) will enable borrowers who have suffered a temporary loss of income to defer 70 per cent of their interest payments for two years.

Margaret Beckett, Housing Minister, said the HMSS was the result of excellent co-operation between the Government, lenders and money advice services, which would give struggling borrowers the time they need to get back on their feet.

The new support is one of a number of initiatives put in place by the Government, which has said it is committed to keeping people in their homes and that repossession must be seen as a very last resort.

Struggling consumers will have to meet a number of criteria to enter the scheme; the home must have been bought before 1 December last year, loss of income must be temporary, the mortgage must be worth less than £400,000, household savings must be less than £16,000 and monthly repayments can only be cut to 30 per cent of the original level.

Lloyds Banking Group (including Halifax and Bank of Scotland), Northern Rock, the Royal Bank of Scotland (which includes NatWest and Ulster Bank), Bradford and Bingley, Cumberland Building Society and National Australia Bank Group (Clydesdale and Yorkshire Bank) will all offer HMSS to their customers.

The Bank of Ireland, GMAC, GE Money, Kensington Mortgages, Standard Life and the Post Office have all pledged to roll out the programme as soon as possible.

All lenders offering customers HMSS will be covered by a guarantee from the Government should borrowers renege on repayments.

Four other high street lenders - Barclays, HSBC, Nationwide and Santander (including Abby and Alliance and Leicester) - are to offer their customers comparable arrangements to HMSS.

The Building Societies Association has said its members have all signed up to a Customer Commitment scheme. Customers experiencing a reduction in income that are willing to make regular monthly repayments have been assured they will receive a similar, if not greater, level of forbearance to that provided under the HMSS.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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