Homeowners’ Mortgage Support Scheme launched today

The Homeowners’ Mortgage Support Scheme (HMSS), details of which were announced last year, is now up and running.

The new measures are aimed at homeowners who lose some of their income and allow up to 70% of mortgage interest payments to be deferred.

Speaking to the BBC, Housing Minister Margaret Beckett explained that the Government is trying to help people who are in difficulties over their mortgage as a result of the economic downturn but are not eligible to be re-housed.

Therefore, applicants will need sufficient income to meet at least 30% of their interest payments.

Other qualifying criteria include a mortgage debt of less than £400,000 and less than £16,000 in savings.

So far, Lloyds Banking Group, Northern Rock, Royal Bank of Scotland, Bradford & Bingley, Clydesdale and Yorkshire banks and Cumberland Building Society have agreed to participate.

Bank of Ireland, the Post Office and Standard Life bank are also saying they will sign up, as are sub-prime lenders GMAC, GE Money and Kensington.

The Council of Mortgage Lenders (CML) has responded rather gloomily to the new provision, which is backed by a government guarantee.

The body’s director general, Michael Coogan, describes the HMSS as “a helpful additional tool” but adds that the CML “does not expect that the guarantee will be triggered in many cases”.

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