The bit below is being described as 'help with redundancy'. Does anyone have any details about whether it will apply to people who go onto means tested benefits? If so then there will be some complex better off issues comparing SMI and deferred interest present values.

"The Prime Minister Gordon Brown has unveiled a 2-year deferment of mortgage interest payments for hard working borrowers who experience a loss of income.

Speaking in the House of Commons this afternoon, Brown unveiled 3 additional forms of protection for cash strapped home owners.

The deferment of mortgage interest payments for 2 years is rumoured to apply to properties worth a maximum of £400,000.

The eight largest UK lenders have so far signed up to the plan, but not the sub-prime lenders who are often quickest to repossess when arrears mount up.

In addition to an existing agreement that all lenders will not repossess for the first three months of arrears, 3 lenders have also now agreed not to repossess for 6 months.

Along with Royal Bank of Scotland, government owned lenders Northern Rock and Bradford & Bingley have also agreed to give struggling borrowers a stay of execution."

Communities and Local Government news release @

http://nds.coi.gov.uk/Content/Detail.asp?ReleaseID=386417&NewsAreaID=2

'The new Homeowner Mortgage Support Scheme will enable households that experience a significant and temporary loss of income as a result of the economic downturn to defer a proportion of the interest payments on their mortgage for up to two years. The Government will guarantee the deferred interests payments in return for banks' participation in the scheme.

The deferred payment will be rolled up and added to the principle, with the borrower paying this off when their financial circumstances improve, maintaining an affordable monthly payment by extending the term of the mortgage.

The Government will work with lenders over the coming days to develop the scheme in detail, with a view to it being available to customers early in the New Year.'

more yesterday from the treasury, including ...

'To qualify, borrowers will ... not be in receipt of SMI'

more @ http://nds.coi.gov.uk/Content/Detail.asp?ReleaseID=387064&NewsAreaID=2

If it's a voluntary scheme who will police whether or not the person is getting SMI? Could someone negotiate help under this scheme before applying for benefit (e.g. to suspend payment on that part of the mortgage that may not be eligible under SMI anyway) and then get SMI later? This could be in the mortgage lenders' interests, particularly with the govt guarantee on defaults and the proposal to restrict help with mortgage costs to 2 years anyway (i.e. they would be more likely to get the mortgage paid for the next 2 years).