Under the Homeowners Mortgage Support scheme, families who have experienced a sudden and significant loss of earnings can defer to interest only mortgage, and may even defer up to 70% of their interest payments to up to 2 years.

In other words, if someone is paying £700 every month as a repayment mortgage to their lender, and the interest element is £500 the they can switch to interest only payment. They also have the option to reduce even the interest element to 30%, or £150 per month for up to 2 years. This will give them breathing space while sorting out their emploment.

Although this scheme has merits, people point out to the major pitfall that the deferring element creates a time bomb situation. There will be a sudden spike of repossessions as people come out of their grace period, should they do not get back to their financial feet for some reason. This will also mean that they have an increased level of debt as repayment as well as the 70% deferred elements have been building up.

Worried, many mortgage companies have infact shied away from this initiave. According to them, they have similar, even better schemes of their own for helping their borrowers to see through the bad times.