Mortgage Rescue guidance

Mortgage Rescue is the government's scheme to prevent the most vulnerable home-owners from becoming homeless due to repossession.

The housing market downturn and current economic climate has created a challenging environment for homeowners. The Homes and Communities Agency is committed to working with our delivery partners, central and local government, lenders and voluntary agencies in order to help applicants facing the prospect of repossession. 

In September 2008 the government announced a £205 million mortgage rescue programme to support up to 6,000 vulnerable owner-occupiers facing repossession to remain in their home. This funding will be distributed by the HCA to partner providers who will add match funding (supported by rent or equity loan charges).

The mortgage rescue programme will comprise of two distinct options, shared equity, where the household remains as a homeowner and Government Mortgage to Rent, where the household becomes a tenant of the housing association.

Shared equity

The household’s existing secured debt is reduced to an affordable level by an equity loan provided by the housing association. The equity loan is secured as a second charge with an interest fee of 1.75%pa.

Government mortgage to rent

The property is purchased by the housing association and let to the household on an Assured Shorthold Tenancy with rent charged at less than 80% of market rent.

Guidance to providers of Mortgage rescue can be found in the Capital Funding Guide.

Information on how to apply is on the Directgov website

Last updated: 7 August 2009

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