Mortgage Rescue

The Mortgage Rescue scheme is for homeowners who have not been able to meet their mortgage repayments, and are at risk of becoming homeless because they face repossession.

Who can get help from the Mortgage Rescue scheme?

To be eligible for the scheme, someone in your household must be considered to be in ‘priority need’.  This could be:

• Someone with dependent children; or
• A pregnant woman; or
• Someone who is vulnerable because of old age or a physical or mental impairment.

Other eligibility criteria which you will need to meet, includes:

• Your household income is less than £60,000;
• The value of your property is no more than £125,000 (although properties which exceed this cap will be considered on an individual basis);
• You should have no more than 40% equity in your property;
• If you are in negative equity it should not exceed 120% of your property’s value;
• The property is suitable for your needs, e.g. it is not overcrowded;
• You shouldn’t own a second home.

How does the Mortgage Rescue scheme work?

Your individual circumstances will be assessed by your local authority and their money advisors.  If you are eligible for the scheme, you may be helped in the following way:

• Shared equity is where a Registered Provider (RP) pays off a proportion of your mortgage immediately, and in return receives a ‘share’ of your property. The proportion you would still own could be between 25% and 75% of your current mortgage, depending on how much you need to be able to afford your mortgage payments. Because you now have a smaller mortgage, your monthly repayments will be reduced.
• Under the Government mortgage to rent option, an RP buys your home. You would no longer own it, but you would stay there as a tenant. It means that you do not have to sell your home and rent another property – you can rent the home you already live in.

How do I enquire about the Mortgage Rescue scheme?

If you are in financial difficulty and at risk of repossession you should get advice from your bank or mortgage lender as soon as possible, as you may be able to make arrangements to renegotiate the terms of your repayments. 

Your lender should treat you fairly and think about what they can do to help you keep your home.  If you are still worried, talk to your local Citizen’s Advice Bureau, who can provide independent financial advice.  Alternatively you can approach your local authority.  Contact details of the relevant local authority departments across Tees Valley and County Durham are as follows:

• Durham County Council: telephone (0191) 301 8470 or (0191) 5270501
• Darlington Council: telephone (01325) 388542
• Stockton Council: telephone (01642) 528389
• Middlesbrough Council: telephone (01642) 728448 or 08000 461600
• Redcar & Cleveland Council: telephone (01287) 612444 or (01642) 774774
• Hartlepool Council: telephone (01429) 284038

If you are eligible for the Mortgage Rescue scheme, the local authority will refer you to Time2Buy, the HomeBuy Agent for Tees Valley and County Durham, who will find an RP to purchase your home.

Once you have been referred to Time2Buy, it can take between three to four months to complete the process. This is similar to the time it might take to sell your home, because you will be going through a similar process that involves having your home valued and Time2Buy will also have to negotiate with your lender(s). It is very important that you keep up with your mortgage repayments during this time. If you cannot make the full payment, talk to your lender about what you can afford. If you need help with negotiating this, ask your money adviser.