Minister for Climate Change Julie James will today announce the Help to Stay Wales mortgage support scheme, a new funding package for Welsh homeowners having difficulty paying their mortgage. With rising interest rates, energy costs and cost-of-living expenses, not being able to meet mortgage repayments is a reality many homeowners are facing.

As part of the Co-operation Agreement between the Welsh Government and Plaid Cymru, a commitment was made to explore Local Authority Mortgages. Help to Stay Wales will work alongside support offered by mortgage providers through the UK Mortgage Charter for customers who are struggling to afford their mortgage payments.

The scheme will provide an option for homeowners who are at serious risk of losing their home by offering a partial repayment of an existing mortgage balance via a low-cost equity loan, secured by a second charge (behind first charge lender), reducing revised mortgage repayments to a level the applicant can afford. The £40m scheme, which opens for applications today, will be available to households with a maximum of income of £67,000 and a property valued at £300,000 or less.

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The Scheme will be operated by the Development Bank of Wales and will be interest free for the first five years. 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.

Modelling by officials shows that if all the £40m is spent over the current and next financial year, it could see 400 to 450 households benefit, based on a £50-60,000 loan. Officials say there are no similar schemes of this type elsewhere.

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.”

Designated Member, Siân Gwenllian, from Plaid Cymru, said: “The detailed work undertaken through the Co-operation Agreement on the mortgage market has led to the creation of Help to Stay Wales to support people affected by soaring interest rates.”

The criteria:

• Property is in Wales and is the applicant’s primary/sole residence
• Applicant is either in or facing mortgage difficulty e.g. in arrears, missed payments, pending interest rate increase, change in personal circumstances
• Applicant has engaged with their first charge lender to discuss their situation
• Applicant has sought debt advice
• Property is clear of any legal actions
• Property is subject to only one existing legal charge
• £300,000 maximum property value
• £67,000 maximum household income
• Max 49% loan to value equity intervention
• Max 100% combined loan to value
• Outstanding mortgage must be on a capital and Interest repayment basis (or move to one as part of Help to Stay Wales intervention)