Schemes that can help if you can’t pay your mortgage

This advice applies to Scotland. See advice for See advice for England, See advice for Northern Ireland, See advice for Wales

This information applies to Scotland only.

Mortgage rescue schemes

Mortgage rescue schemes stop you losing your home if you have mortgage arrears that you can’t pay off. These schemes allow you to keep living in your own home as a tenant, part-owner or part-tenant. These schemes are also called buy back, sale and rent back or sale and lease back schemes.

Mortgage rescue schemes aren’t right for you if your financial worries are temporary. If you know that your financial problems are temporary, you should negotiate with your lender about your arrears and ongoing mortgage payments.

If you've started getting letters from your mortgage lender threatening court action, you should get help from a Citizens Advice Bureau.

Get advice about your options

If you’re thinking about signing up to a mortgage rescue scheme, you should get advice from an experienced adviser. You can get advice from a Citizens Advice Bureau. 

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

If you’re struggling to pay your mortgage or are already behind on your payments, you can take steps to avoid losing your home, including talking to your lender.

Talk to your lender

If you’re struggling to pay your mortgage, you should contact your lender as soon as possible. Your lender might be able to offer you an alternative to a mortgage rescue scheme, including:

  • taking a break from paying your mortgage - known as a payment holiday

  • paying your mortgage over a longer period - this is called extending the mortgage term

  • switching temporarily to interest-only repayments - this will reduce the amount you have to pay back every month.

Read more about what to do if you’re struggling to pay your mortgage.

Who provides mortgage rescue schemes

Mortgage rescue schemes can be run by:

  • a not-for-profit agency - such as a social landlord, a local council or a housing association

  • the Scottish government - for example, the Home Owners' Support Fund.

Mortgage rescue schemes run by social landlords

Some local councils and housing associations run mortgage rescue schemes independently, but most work with the Scottish government on the Home Owners’ Support Fund.

To find out if there are any mortgage rescue schemes run by local councils or housing associations, contact your local council. You can find contact details for your local council on mygov.scot.

The Home Owners' Support Fund

The Scottish government’s Home Owners’ Support Fund is made up of 2 schemes:

  • Mortgage to Rent

  • Mortgage to Shared Equity.

Mortgage to Rent 

The Mortgage to Rent scheme lets you stay in your home by selling it to a social landlord. You’ll continue to live there as a tenant.

Once the property is sold to the social landlord, the secured debts on your property will be paid off and you’ll pay rent to the social landlord. The scheme will pay the cost of legally transferring ownership to the social landlord. If there’s 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. This extends the Mortgage to Rent scheme to homeowners whose interest-only or endowment mortgage has ended and who can’t repay the final sum.

There’s more information about the Mortgage to Rent scheme on the Shelter Scotland website.

Mortgage to Shared Equity

In the Mortgage to Shared Equity scheme, the Scottish government buys a stake in your property. You’ll carry on being the owner and paying a mortgage to your lender for a reduced amount. 

You’ll still have full responsibility for looking after and insuring your home. You’ll also have to pay for changing the legal documents about ownership of the property. You’ll 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.

There’s more information about the Mortgage to Shared Equity scheme on the Shelter Scotland website.

Who can apply

You can apply for the Mortgage to Rent or Mortgage to Shared Equity scheme if:

  • you’ve had independent advice from a money adviser - the adviser will submit the application form for you. You can get advice from a Citizens Advice Bureau

  • the value of your property is no more than the local maximum property price. In some cases, the maximum price will be disregarded if you're disabled and have particular housing needs

  • you haven’t been able to make full payments on your mortgage for at least 3 months and have arrears of at least 1 month - you must include a letter from your lender confirming this in your application form. For the Mortgage to Rent End of Term pilot, you must show that you can’t agree with your lender on how to pay back the principal sum

  • you’re not eligible for help through other UK government support schemes - you must include a letter confirming this in your application form. In exceptional cases you might be allowed to apply

  • you don’t own a property elsewhere - you might be allowed to apply in exceptional circumstances

  • you or another joint owner intends to remain in the property and at least one of the owners has lived in the property for at least a year

  • you have capital of no more than £2,000 if you’re under 60, or no more than £4,000 if you’re 60 or over.

There are also rules about how much of the property you have a mortgage for. For example, in the Mortgage to Shared Equity scheme you must hold at least 20% equity in your home.

There’s more detail about each scheme on mygov.scot.

If you don’t get onto either scheme

If you’re unsuccessful in applying to the Mortgage to Rent or the Mortgage to Shared Equity scheme, you might be in danger of losing your home.

You should get help from an experienced adviser to try to stop your lender repossessing your home. You can get advice from a Citizens Advice Bureau. 

Support for Mortgage Interest

As an owner-occupier, if you're getting certain means-tested benefits you might be able to get Support for Mortgage Interest (SMI) to help pay the interest on your mortgage. SMI is a loan with interest. 

Before you sign up to the SMI scheme, you should check if it will affect your benefit entitlement. For example, it might affect your Housing Benefit or the Universal Credit housing element.

Things to check before signing up to a mortgage rescue scheme

If you’re thinking about signing up to a mortgage rescue scheme, you need to understand what you’re signing up to and how it will affect your housing and financial situation in the long term.

You should find out:

  • if independent benefit and debt advice is provided

  • who pays for the costs of selling the home - known as the conveyancing costs. This might be hidden as an administration fee

  • what type of tenancy you’re being offered, if you’re selling the whole property - you might be offered a tenancy with limited protection from eviction at the end of the tenancy

  • the cost of rent and the agreement on rent increases

  • what your responsibilities are as a tenant

  • what the landlord is responsible for

  • if you can buy back the property when your circumstances change

  • if there’s any insurance cover in case the mortgage rescue scheme develops financial difficulties.