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What is the Mortgage Rescue scheme?

The Mortgage Rescue scheme is a government scheme, which is run by your local housing authority - the organisation that manages housing for your council. If you are eligible, you could get financial help to stay in your home. You make your application for help from the scheme to your local council.

• Find 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.

• Find your local council

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.

• Find your local council

When you apply for help from the scheme:

1. the council will arrange for you to meet with their money advisers, if you haven’t already seen an adviser
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 a ‘shared equity loan’ or through a ‘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

Shared equity loan

The RSL can provide an equity loan to reduce your monthly repayments. You’ll pay a low monthly interest-only charge on the loan. You’ll need to have at least 25 per cent equity in your property to qualify for the equity loan. This means your mortgage isn’t worth more than 75 per cent of the property’s value.

Government mortgage to rent

The RSL may suggest a Government mortgage to rent, which means the RSL will buy your home for 97 per cent of its market value. You’ll stay in your home and pay rent to the RSL as their 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.

More useful links

• Where to get advice and support on debt

• Mortgage arrears and payment difficulties (money, tax and benefits section)

• Jobseeker's Allowance (money, tax and benefits section)

• Council Tax Benefit (money, tax and benefits section)

• Tax credits (money, tax and benefits section)