Housing minister Margaret Beckett has announced that a support scheme to help struggling home owners remain in their homes begins today.
The Homeowners Mortgage Support scheme allows eligible borrowers suffering a temporary loss of income to defer their mortgage interest payments for up to two years.
To qualify borrowers must have bought their home before December 1 2008, be an owner-occupier, 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% of the total interest payment.
Borrowers will need to have kept up regular mortgage payments for at least five months and sought independent money advice.
Major high street lenders offering their customers the scheme include Lloyds Banking Group, Northern Rock, Royal Bank of Scotland and Bradford & Bingley.
Other lenders participating in the scheme include the National Australia Bank Group, parent of Clydesdale and Yorkshire Bank, and Cumberland Building Society.
Four other high street lenders – Barclays, HSBC, Nationwide, and Santander – have confirmed they will offer borrowers similar alternatives to the HMS.
But these lenders have decided not to take up the government guarantee that is offered alongside the scheme.
Margaret Beckett, housing minister, 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.
“Today’s news is a result of excellent co-operation between government, lenders, and money advice services.
“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.”
Gary Hoffman, chief executive of Northern Rock, says: “We are fully committed to a successful launch of the HMS 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.”