A new government plan aiming to reduce the risk of repossession for those who have suffered a loss of income has been launched.
The Homeowner Mortgage Support Scheme allows homeowners to defer a proportion of the interest rates on their mortgage for up to two years, with the government guaranteeing the deferred payments as long as the borrower’s bank is taking part in the scheme.
Eight of the country’s largest banks have already announced their support and the government is planning on working with lenders over the coming days in an effort to make the scheme available in early 2009.
“The scheme will give people who face a temporary fall in their income the confidence that they need to rearrange their finances,” chancellor Alistair Darling explained.
Those struggling with debt management may wish to take advantage of the initiative when it launches in the New Year.
Jon Pain of the Financial Services Authority recently called for mortgage lenders to treat their customers – especially those in arrears – fairly during the economic crisis.
By Tom Musk