According to multiple media reports, in a meeting with banking leaders Chancellor Kwasi Kwarteng and the Treasury mooted the possibility of lengthening the timeline on the scheme which is due to expire at the end of this year.

Reports also suggested that rising interest rates in the buy-to-let sector and vulnerable customers on interest-only mortgages were discussed.

The mortgage guarantee scheme was introduced in 2021 to increase the availability of 95% loan-to-value mortgages after they were withdrawn during the pandemic.

It offers lenders the option to buy a guarantee on a mortgage where the borrower has a deposit of only 5%. It compensates lenders for a portion of net losses suffered in the case of repossession.

The guarantee applies down to 80% of purchase value of the guaranteed property covering 95% of these net losses and the lender retains a 5% risk in portion of losses covered by the guarantee.

Figures from earlier this year showed low uptake of the scheme as it supported around £3.2bn in loans since launch in April last year.

The value of the mortgage guarantee was £474m and the value of the properties was pegged at £3.42bn. The government also confirmed there were 17,966 total completions.

Rachel Dixon, mortgage broker at RH Dixon, said she had been talking about them with every client as they had priced some cases up to 2.25% lower.

She pointed to a NatWest product which was priced at 2.95% versus a two-year fixed rate at 5.4%.

The Treasury declined to comment.