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Schemes to help homeowners in danger of losing their homes

This advice applies to Scotland

This information applies to Scotland only.

Coronavirus - if you can't pay your mortgage

If you ask your mortgage provider, they might agree to pause your mortgage payments for 3 months. This is called a 'payment deferral'.  

You can't get a payment deferral after 31 March 2021, so make sure you ask your mortgage provider for one before this date.

If you already have a payment deferral, you might be able to extend it to a total of 6 months. 

Think carefully about whether any changes to your mortgage payments are right for you. When your payment deferral ends, you'll need to make up for the payments you missed, plus interest added during the deferral. This means you'll have to either:

  • pay more each month
  • keep paying for longer.

You might have other options to keep paying your mortgage, like increasing your income by claiming benefits, or claiming on an insurance policy. 

You can check if you should ask for a payment deferral and what else you can do if you can’t pay your bills

Mortgage rescue schemes

If you're at risk of losing your home because you have mortgage arrears that you can’t pay off, a mortgage rescue scheme might help. It allows you to keep living in your own home as a tenant or part-owner/part-tenant. These schemes might also be known as buy back, sale and rent back or a sale and lease back scheme.

They are not suitable if your financial worries are temporary. When you know that your financial circumstances are going to improve, you should negotiate with your lender about your arrears and ongoing mortgage payments.

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 - where to get advice.

Who provides mortgage rescue schemes

A scheme could be run by:

  • a not-for-profit agency such as a social landlord, a local council or housing association
  • the Scottish government – the Home Owners' Support Fund.

Before signing up for a mortgage rescue scheme

If you're thinking about signing up to a mortgage rescue scheme 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.

You should find out:

  • if benefit and debt advice is provided and is it independent - you should always get independent financial advice.  You should get advice from an experienced adviser, for example, at a Citizens Advice Bureau - where to get advice.
  • who pays for the costs of selling the home, the 'conveyancing' costs - this might be hidden as an 'administration' fee
  • if you are selling the whole property you must check what type of tenancy you're being offered. You might be offered a tenancy with limited protection from eviction at the end of the tenancy. Find out more about your rights as a private tenant
  • how is the rent being set and what is in the agreement about rent increases
  • what are your responsibilities and obligations as a tenant
  • what are the responsibilities and obligations of the landlord
  • can you buy back the property if your circumstances change
  • is there any insurance cover in case the mortgage rescue scheme develops financial difficulties.

As an owner-occupier, if you're getting certain low income benefits you might be able to get Support for Mortgage Interest (SMI) from the Department for Work and Pensions (DWP) to help pay towards the interest on your mortgage. SMI is a loan and the DWP will charge interest. However if you sell your home but continue to live there and pay rent, you might not be eligible for Housing Benefit or Universal Credit housing element to help pay your rent.

For more information about Support for Mortgage Interest, check how to decide if you should apply for SMI

You can find out more about Housing Benefit

For more information about Universal Credit housing element, you can check how much Universal Credit you'll get

Mortgage rescue schemes run by social landlords

Some local councils and housing associations might run mortgage rescue schemes independently but most have chosen to work with the Scottish government in providing mortgage support to home owners as part of the Home Owners' Support Fund and its 2 schemes.

To find out if there are any mortgage rescue schemes run by local councils and housing associations, ask your local council.

If you are thinking about signing up to a mortgage rescue scheme run by a social landlord, you should get advice from an experienced adviser, for example, at a Citizens Advice Bureau - where to get advice.

You might 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.

Home Owners' Support Fund: Mortgage to Rent and Mortgage to Shared Equity schemes

The Mortgage to Rent and the Mortgage to Shared Equity schemes are the 2 schemes that make up the Home Owners' Support Fund run by the Scottish government.

What are the schemes

The Mortgage to Rent (MTR) scheme lets you stay in your home by selling it to a social landlord. You become a tenant of that landlord. Once the property is sold to the social landlord, the secured debts/loans on your property are paid off and you pay rent to the social landlord. The cost of legally transferring ownership to the social landlord is paid by the scheme not by you. If there is money left over you might be able to keep it.

The Scottish government is running a pilot scheme called the Mortgage to Rent End of Term (EOT) Cases Pilot. This extends the MTR scheme to homeowners whose interest only or endowment mortgage has come to the end of its term and who are unable to repay the principal sum.

The Mortgage to Shared Equity (MTSE) scheme allows you to carry on being the owner but reduces what you owe for your property because the Scottish government buys a stake in your property. This means that you can reduce your mortgage. You don’t have to make any payments to the Scottish government but you do carry on paying a mortgage to your lender for a smaller amount. You retain full responsibility for looking after and insuring the property. You will have to pay the costs of changing the legal documents about ownership of the property and you will have to use a solicitor to do this. When your circumstances improve you can buy back the proportion of your property that the Scottish government owns.

Who can apply

To be able to apply for these schemes:

  • you have to get independent advice about your financial situation from a money adviser and they will submit the application form for you
  • the value of your property must be no more than the local maximum property price. In some cases, the maximum price might be disregarded if you're disabled and have particular housing needs 
  • you must not have been able to make full payments on your mortgage for at least 3 months and have arrears of at least 1 month. A letter from your lender confirming this must be included with the application form. For the Mortgage to Rent End of Term Cases Pilot, you must be able to show that you can't agree with your lender on how to pay back the principal sum
  • you must not normally be eligible for help through other UK government support schemes. A letter confirming this must be included with the application form. In exceptional cases, you might be allowed to apply
  • you must not normally own a property elsewhere. In exceptional circumstances, you might be allowed to apply
  • you or another joint owner intends to remain in the property and at least one of the owners must have lived in the property for at least 12 months
  • you must not have capital of more than £2,000 if you are under 60 years old, or more than £4,000 if you are 60 years old or older.

There are also rules about the proportion of the property for which you currently have a mortgage. For example, in the Mortgage to Shared Equity Scheme you must hold 20% or more equity in your home.

If you're interested in either scheme, you can read more about each scheme on the Scottish government website.

Contact for MTR and MTSE schemes

The MTR and MTSE schemes are run by the Scottish government. The contact details are:

Home Owners' Support Fund Team
The Scottish Government
Housing and Regeneration
Atlantic Quay
5th Floor
150 Broomielaw
Glasgow
G2 8LU

Helpline: 0300 244 1093
Email: hosf@gov.scot

If you don’t get on to either scheme

If you are unsuccessful in applying to the Mortgage to Rent or Mortgage to Shared Equity schemes you might be in serious danger of losing your home. You must seek help from an experienced adviser for example, at a Citizens Advice Bureau, as you might be able to suspend any legal action your lender is taking to repossess your home. Find out how to get advice from a local Citizens Advice Bureau.

Further help

You might be eligible for benefits that will increase your income. To check if you are getting all the benefits you might be entitled to, you can use an online benefits tool on the GOV.UK website.

For more information and help with cutting down your expenses, use our budgeting tool.

On the Money Advice Service website

The Money Advice Service website has lots of useful information about managing your money, mortgages, insurance and other financial products.

Independent financial advice

The following organisations can help you find an independent financial adviser:

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