Repossession and how to avoid it Mortgage help from the government

Government schemes could give you mortgage help to stop repossession

There are a number of government schemes that may be able to help if you’re struggling with your mortgage. Visit our guide to dealing with debt for more information on where to get help.

Support for mortgage interest

Support for mortgage interest (SMI) is aimed at homeowners on certain income-based benefits, such as income support or income-based jobseeker’s allowance.

It is paid to your mortgage lender by the government 13 weeks after you claim and covers interest due on the first £200,000 of your mortgage at the Bank of England’s published monthly average mortgage interest rate.

It is only paid for up to two years if you are getting income-based jobseeker’s allowance.

Contact Jobcentre Plus or the Pension Service to check whether you’re eligible and to claim.

Mortgage rescue scheme

The government has also introduced the mortgage rescue scheme in England through local authorities to help people with priority needs, such as pregnant women or people with dependent children, at risk of repossession.

You must have a household income of less than £60,000 a year to qualify and meet other conditions relating to the value of your mortgage and home.

A registered social landlord (RSL) provides a loan in return for a share of the equity in the property to reduce your mortgage payments, as long as your mortgage is worth no more than 75% of your property’s value.

Alternatively, the RSL buys your home for 97% of its market value and clears your mortgage. You pay a reduced rent to it to carry on living in your home instead.

You can find out about the scheme by contacting your local council or being referred to it by an advice agency, such as Citizens Advice, your mortgage lender or the courts.

Homeowners mortgage support

The homeowners mortgage support (HMS) scheme was open to homeowners who had fallen behind with their mortgage payments due to redundancy or loss of income but, as planned, this closed to new entrants on 21 April 2011.

It was designed to help households with a temporary drop in income from losing their home.

Through HMS you were able to take a 'holiday' of up to two years from paying some of the interest on your mortgage.

Not all mortgage lenders offered homeowners mortgage support, but others offered similar schemes.

Visit Directgov for more information on these schemes.

State benefits

You should also make sure you are receiving all the state benefits you are entitled to. Visit Directgov for more on benefits.