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Mortgage rescue schemes

What is a mortgage rescue scheme

If you're struggling to pay your mortgage, one option you may want to think about is a mortgage rescue scheme run by a social housing landlord such as a housing association.

Mortgage rescue schemes are different from schemes run by private firms or individuals. Schemes run by private firms or individuals are known as sale and rent back, buy back or sale and lease back schemes.

For more information about sale and rent back schemes run by private firms, see Sale and rent back schemes.

A mortgage rescue scheme may be the right option for you, as long as you check the terms and conditions of the scheme very carefully. You need to understand exactly what you are signing up to, and how this will affect your housing and financial situation in the long-term.

On this page, we tell you about:

If you’re having serious difficulties paying your mortgage, for example, if you’ve started getting letters from your mortgage lender threatening court action, you should get help from an experienced debt adviser straight away.

You can get debt advice from a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

You might also find it helpful to look at What happens if your mortgage lender takes you to court.

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Things to look out for before signing up to a mortgage rescue scheme

If you're thinking about signing up to a mortgage rescue scheme, there are some things you should look out for. These include:

  • what type of tenancy is being offered? If it's a tenancy which only lasts a certain period of time to start with, can it be renewed after that and when can the landlord take court action to evict you?
  • how is the rent set, including how often will it go up and by how much?
  • what are the responsibilities and obligations of both the landlord and tenant?
  • can shares in the property be bought back if your financial position improves?

You should also bear in mind that if you sell your home but continue to live there and pay rent, you may not be entitled to Housing Benefit.

For more information about Housing Benefit, see Help with your rent – Housing Benefit.

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Mortgage rescue schemes run by social housing landlords

Some local authorities and housing associations may run other mortgage rescue schemes apart from the government-backed scheme. These schemes may be offered as part of their home-ownership services, although there may not be many of them around. Also, they often have strict rules about who can apply, so you may not qualify.

To find out more about mortgage rescue schemes run by local authorities and housing associations, ask your local authority.

If you are thinking about signing up to a mortgage rescue scheme run by a social housing landlord, you should get advice from an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

You may also want to think about getting independent financial advice. This will help to make sure you've thought carefully about how signing up to a mortgage rescue scheme will affect your financial and housing situation in the longer term.

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Further help

More information about mortgage problems

On Adviceguide

On the Money Advice Service website

Go to www.moneyadviceservice.org.uk

Independent financial advice

If you're thinking about signing up to a mortgage rescue scheme, you should get independent financial advice. The following organisations can help you find an independent financial adviser:

Independent Financial Promotions (IFAP)

Website: www.unbiased.co.uk

Institute of Financial Planning (IFP)

E-mail: enquiries@financialplanning.org.uk
Website: www.financialplanning.org.uk

Personal Finance Society (PFS)

E-mail: customer.serv@thepfs.org

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Citizens Advice

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