In this brief guide, we will discuss the mortgage rescue scheme.

The mortgage rescue scheme closed to new applicants on 31 March 2014.

The mortgage rescue scheme was a scheme set up by the government to help homeowners who could no longer afford to make their monthly mortgage repayments and hence were at risk of having their homes repossessed.

The mortgage rescue scheme was administered by local councils although it was not by law that it must have been accessible through a council.

Eligibility for the mortgage rescue scheme

To be eligible for the mortgage rescue scheme you will need to have taken out a first or second mortgage on your home.

To be eligible for the mortgage rescue scheme you will also need t have had priority for a home if you were to become homeless. This would be the case if you had young dependants, a pregnant woman vulnerable people, people with disability or old people.

Aside from that, the local councils will have evaluated your eligibility for  the scheme using the below guidelines:

  •  “the applicant must have explored all alternatives to repossession with their mortgage lender. MRS is only an option when there are no viable alternatives. The lender must be prepared, in principle, to support the application for mortgage rescue. The applicant has an up-to-date financial statement drawn up by a money advice agency, designated by the local authority. This may be a local Citizens Advice, National Debtline, the Consumer Credit Counselling Service or the local authority’s own in-house service
  • there are no outstanding charges on the applicant’s property that prevent it being sold
  • an up-to-date valuation of the applicant’s property indicates mortgage rescue is a viable option. Estate agents and chartered surveyors can provide a valuation. More than one valuation will be required
  • MRS should be both affordable and suitable for the applicant
  • the applicant has been provided with sufficient time, advice and assistance to enable them to make an informed decision about all their housing options.”

The above guidelines would have also needed to be met or you to be eligible for the mortgage rescue scheme.

Who was excluded from the mortgage rescue scheme?

Some household were excluded from the mortgage rescue scheme and hence could not claim from this scheme.

The household who were excluded includes homeowners who:

  • “have outstanding loans that are more than 20 per cent greater than the value of their home, and/or
  • have an annual gross income above £60,000, and/or
  • have a second home, and/or
  • own a property valued above a regionally set cap. There may be exceptions to the regional cap where the household has a need for an exceptionally large property or where the property is specifically adapted for the needs of a member of the household.“

Although the mortgage rescue scheme is no longer available and you will no longer be able to apply to it, there are other schemes which you may still be able to apply to if you are unable to keep up on your monthly mortgage repayments.

Some of these include:

  • The support for mortgage interest 
  • Homeowners support fund
  • Universal credit

In this brief guide, we discussed the mortgage rescue scheme.

If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.