Homeowners in Wales who are in mortgage difficulty have been thrown a lifeline in the form of a Government-backed loan to repay some of their debt.
The Help to Stay Wales mortgage support scheme is an equity loan backed by funding from the Welsh government to support homeowners having difficulty paying their mortgage.
As part of the budget agreement with Plaid Cymru for 2023-24, £40m of repayable capital funding has been made available over this year and next year to bring forward schemes to provide flexible financial support.
Homeowners who are at serious risk of losing their home will be offered the option of a partial repayment of their mortgage balance, to reduce their mortgage repayments to an affordable level.
The scheme offers eligible households assistance from the early point of arrears accruing rather than waiting for a threat of repossession to be made.
The partial repayment is made using an equity loan which is interest free for the first five years. It is secured by a second charge that sits behind the borrower’s main mortgage.
The scheme will be operated by the Development Bank of Wales.
The purpose of the scheme is to reduce the number of homeowners at risk of repossession and homelessness by offering them time to resolve their underlying financial issues.
Helping homeowners live in their homes
Minister for Climate Change, Julie James, said: “The current economic climate presents many challenges for homeowners as they face the significant rise in fuel costs, high inflation, escalating rent and house prices with incomes often not keeping pace.
“The aim of the Help to Stay Wales Scheme is to help homeowners to continue living in their precious homes.
“By widening our current mortgage rescue offer, we have the opportunity to help more people at an earlier stage before they face the awful threat of repossession.”
A number of unnamed lenders have already signed up to the scheme.
