Further details of deferred mortgage repayment scheme

Further details have emerged of the Government’s plans to help homeowners struggling with mortgage payments, as outlined in the Chancellor of the Exchequer’s November pre-budget report.

The new measures allow homeowners who fit the criteria to defer interest payments on their loans for a period of up to two years.

The Government will guarantee a proportion of any loss to the lender on the deferred payments.

The £1 billion scheme is available to those with mortgages under £400,000 who have been made redundant or otherwise lost income from work, making full mortgage repayments difficult for the time being.

To qualify, borrowers also need to be able to show that they have been making some level of regular repayment on their mortgage and that they have been in contact with their lender regarding their payment difficulties.

Anyone with savings exceeding £16,000, or in receipt of mortgage rescue assistance is excluded from the scheme.

Neither does it cover mortgages on second homes or buy-to-let properties.

Lenders so far signed up to the initiative include Northern Rock, Bradford & Bingley, RBS, Lloyds TSB, Barclays, HSBC, Abbey and Nationwide.

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