Details of a new scheme were announced, which aims to help people who suffer a temporary loss of income stay in their home. The Homeowner Mortgage Support Scheme will enable households that experience a significant and temporary loss of income as a result of the economic downturn, to defer a proportion of the interest payments on their mortgage for up to two years.
The deferred payment will be rolled up and added to the principle, with the borrower paying this off when their financial circumstances improve, maintaining an affordable monthly payment by extending the term of the mortgage. The Government will guarantee the deferred interests payments in return for banks' participation in the scheme.
The eight largest banks - HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays, RBS and HSBC - have pledged that they will work to implement the scheme, with a view to it being available early in 2009.
This scheme is in addition to recent measures announced, aimed at helping homeowners, which include: