Mortgage rescue schemes

The scheme which applies exclusively in Scotland is called the Scottish Government Homeowners’ Support Fund and comprises two distinct schemes dependent on the homeowner’s circumstances. 

The two schemes are the Mortgage to Rent scheme and the Mortgage to Shared Equity scheme:

Mortgage to Rent scheme

The Mortgage to Rent Scheme allows home owners to sell their home to a participating social landlord and remain in the home as a tenant with a Scottish Secure Tenancy. In addition to the above criteria, where they have a capital and interest mortgage they must not have more than 25% of equity; if they have an interest only mortgage or a trustee has been appointed to their estate, this criteria does not apply. 

If an application is approved the property is sold to a participating housing association or local authority. The borrower can receive back up to £11,360 of any equity they have where they are under 60; £17,040 where they are over 60.

The Scottish Government won't get involved in shortfall negotiations between lenders and applicants. If you need support, your Money Adviser will able to assist you.

Mortgage to Shared Equity scheme

This scheme allows the Government to provide a loan to pay off some of the debtors secured debt and, therefore, reduce their monthly payments. The home owner is not required to make monthly payments for this loan. A Scottish Government adviser decides what level of secured debt they will pay off based on what the borrower can afford. This reduces the home owner’s monthly payment. The borrower must be in a repayment mortgage and have at least 20% of equity. They must also not have a trustee appointed to their estate and their home must meet tolerable standards.

Borrowers in the Mortgage to Shared Equity Scheme will be expected to remain in the Scheme for at least two years, after which they can buy back as much of their equity as they can afford. The Scottish Government expects them to buy back all their equity within ten years.

The home owner is responsible for all the legal and survey fees in the scheme.

For more information, view the Scottish Government’s Homeowners’ Support Fund webpage.