Prime Minister Gordon Brown announced the scheme back in December 2008.
It is designed to protect homeowners that lose their income and can’t afford to pay their mortgage.
The government plans to cover 80% of deferred interest but not the capital. There will be an interest rate cap of 8%, and a four years claim guarantee period.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association is concerned the costs are stacked too heavily in the government’s favour.
He says: “While welcoming that the reality is that there are still a myriad of finer but crucial details which have yet to be settled.
“The scheme is complex as is evident from the published details and not without risks for borrowers and lenders so it is important these are got right and we have limited time to do this before an April launch.
He says the general view is that the scheme is not actually going to help very many people.
He adds: “Certainly no borrower should be under any illusion that they will automatically be eligible for assistance under the scheme.
“Considerably more important is the way lenders are already helping borrowers in difficulty with their mortgages. And they’re clearly doing a good job – that’s why the CML’s actual possession numbers are lower than the forecast for last year.”
Williams believes the most important action government could now take to help mortgage borrowers is to move to re-open the mortgage market as a whole.
He says: “Government is supporting a small number of lenders and expecting them to do all of the UK’s lending this year.
“They continue to ignore the full spectrum of lenders – including those who rely on the wholesale and capital markets for funding. It’s these lenders who can offer tangible help in the form of competitively priced mortgage products, to non-prime, buy-to-let and self employed borrowers.
“Mending the securitisation markets is a real challenge but it is going to help far more borrowers than paying the interest costs on some mortgages for a couple of years.
“The restrictive approach adopted to date will not work and we need to see all banks, building societies and specialist lenders given access to government programmes to restart the funding so that the market can best help borrowers including those in difficulty.”