Mortgage to Rent scheme: who is eligible?

The Mortgage to Rent scheme lets a social landlord, such as a housing association or your local council, buy your home while you carry on living in it as a tenant. It is run by the Scottish Government as part of the Home Owners' Support Fund, and it is a last resort for homeowners who are behind on their mortgage and at risk of repossession¹.

You do not need equity in your home to apply. You can apply even if you are in negative equity, which means you owe more on the mortgage than the property is worth³. What you do need is a home that is in danger of being repossessed, a failure to reach agreement with your lender about the arrears, and at least 12 months living at the address¹.

The trade-off is ownership. After the sale you would no longer own your own home, and you would normally be given a Scottish Secure Tenancy instead². The price paid is the adjusted open market value less the cost of repairs, up to a maximum of £6,000, and the valuation is not negotiable¹.

Mortgage to Rent: a social landlord buys your home and you stay as a tenant

Under the scheme, the Scottish Government arranges for a social landlord such as a housing association or local authority to buy your home, and for you to continue living there as a tenant¹. The money from the sale is used first to repay all the loans secured against your home, plus the cost of lifting any inhibition and discharging any trustee².

You will be charged the same rent as your landlord charges other tenants for similar types of property in similar locations². Your new landlord will normally provide a Scottish Secure Tenancy². You can stay in your home, but as a tenant rather than a homeowner³.

There is no choice of landlord. The Scottish Government will try to identify a social landlord that is participating in the scheme and owns houses in the area, but the decision is not yours¹. Applications for the Mortgage to Rent and Mortgage to Shared Equity schemes are considered in the order they are received, and if funding is unavailable the Scottish Government will agree and publish a prioritisation process⁵.

Who is eligible: arrears, repossession risk and 12 months' residence

The scheme is aimed at homeowners whose home is in danger of being repossessed³. You must have been unable to make full payments on a loan secured against your home for at least three months and have cumulative arrears of at least one month¹. You must also have failed to reach agreement with your lender on how to manage those arrears, or have had a trustee appointed to your estate who is looking to force the sale of your property¹.

There is a residence test: you must have lived in your home for the last 12 months¹. Your home must also be worth less than a set limit for its size and the area where you live⁴. The Scottish Government publishes property thresholds guidance that covers the Mortgage to Rent scheme⁶.

If a trustee has been appointed to your estate, the condition about arrears does not apply¹. That matters because a trustee in a sequestration or similar process may be looking to force a sale, and the scheme is designed to give the household somewhere to stay rather than see it turned out.

Capital limits: £2,000 under 60, £4,000 at 60 or over

There is a cap on the capital you can hold and still qualify. You must not hold capital in excess of £2,000 if you are under 60 years of age, or £4,000 if you are 60 years or older¹. The same limits appear in the 2015 Home Owners' Support Fund information booklet and in independent guidance from Business Debtline and National Debtline².

The capital limit is separate from the money you are allowed to keep after the sale. It is a test of what you hold going in, not a cap on the proceeds. For context, the upper capital limit for Housing Benefit, beyond which no benefit is payable, is £16,000, and that still applies for claimants above the qualifying age for Pension Credit⁹.

How much money you can keep after the sale

The money from the sale must first be used to repay all of the loans secured against your home, plus the cost of lifting any inhibition and discharging any trustee². What is left over is the capital you may keep, within limits.

If you are aged between 16 and 59 you can keep up to £11,360 of any capital left over after those debts have been repaid². If you are aged 60 or over, you will be allowed to keep up to £17,040². Independent guidance from Business Debtline and National Debtline gives the same figures⁷.

Older Scottish Government guidance from 2010 set different amounts: up to £8,000 if you were under 60 and up to £12,000 if you were 60 or over, after secured lenders and others with an interest in your home had been repaid¹⁰. The 2015 booklet and the independent guides are the newer figures, and they are the ones to work from.

Negative equity, shared ownership and shared equity homes

Negative equity is not a barrier. You can apply to join the scheme even if you are in negative equity³. If your home is in negative equity, you may only get help from the Mortgage to Rent scheme, because the Mortgage to Shared Equity scheme is not available in that situation⁷.

If you bought under a Scottish Government funded shared ownership or shared equity scheme, you can still be considered for Mortgage to Rent, but not for Mortgage to Shared Equity¹. Independent guidance confirms that if your home is a shared equity or shared ownership property, you can apply to the Mortgage to Rent scheme, and that you cannot join the Mortgage to Shared Equity scheme if you bought a shared ownership or shared equity house⁷.

It is worth knowing how the wider shared ownership landscape works, because the rules differ across the UK. In England, the Right to Shared Ownership lets eligible housing association tenants buy a share of their home as a leaseholder, pay rent on the rest, and usually pay monthly service charges¹¹. It applies to most rented homes funded by the Affordable Homes Programme 2021 to 2026, and eligible tenants have the right to buy a minimum 10% share¹². It is not open to homes rented out by a local authority, a co-operative housing association or a Community Land Trust¹¹. In Scotland, the Open Market Shared Equity Scheme helps eligible buyers on low to moderate incomes buy a home where that is sustainable, and it is open to first-time buyers and priority access groups including social renters, disabled people, people aged 60 and over, members of the armed forces and veterans¹⁴.

How to apply through an independent adviser

Applications go through an independent adviser. You complete an application form after meeting an independent adviser, and your application will need to include a letter from your adviser confirming that you have taken independent advice⁵. That step is not optional, and it is the point at which the scheme's rules are checked against your circumstances.

Applications for the Mortgage to Rent and Mortgage to Shared Equity schemes are considered in the order they are received¹⁰. If funding is unavailable, the Scottish Government will agree and publish a prioritisation process¹⁰.

How the price is worked out

Your home will be valued at its current market value as assessed by a professional surveyor appointed by the Scottish Government¹⁰. The surveyor also provides an adjusted open market value, which assumes the repairs are rectified¹. The price that will be paid for your property is calculated by deducting the total cost of repairs required, up to a maximum sum of £6,000¹.

The 2015 booklet describes the price as the Open Market Value identified through the Single Survey of your property, updated every three months throughout the case². The values arrived at are not negotiable and there is no appeal process².

What happens if my home needs more repairs than the scheme allows

Repairs under the scheme are based on the Scottish Housing Quality Standard and on any work identified as a result of gas and electrical checks carried out by the landlord². If the cost of repairs is estimated to be more than £8,500, your application will be withdrawn unless funding for the excess repair costs can be found².

Older guidance set the threshold lower. It said that if the cost of repairs was estimated to be more than £6,000, you would not be eligible for the scheme unless someone was prepared to pay the amount above £6,000¹. The two figures differ, and the newer booklet figure is £8,500². The £6,000 figure also appears as the maximum deduction from the purchase price for repairs¹.

Where the scheme does not run, and what exists instead

Mortgage to Rent is a Scottish scheme. There is no equivalent in England, Wales or Northern Ireland. In Wales, local authority mortgage rescue schemes exist for homeowners whose lender intends to repossess, but the terms are different: you would no longer own your own home and in most cases you would be given an assured or an assured shorthold tenancy¹⁸. Shelter Cymru sets out how those schemes work¹⁸.

Elsewhere in the UK, help with mortgage costs comes through other routes. Support for Mortgage Interest is a loan, and if you rent your home you cannot get help with housing costs that way¹⁹. Rent to Buy is a different product entirely: it is available in England apart from London, and it is not available in Scotland²⁰. Tenancy Saver Loans in Wales are for tenants in rent arrears or in danger of getting into rent arrears, not for homeowners²¹.

Where to get free help

The scheme itself requires independent advice, and free help is available. The Scottish Government's Home Owners' Support Fund guidance and the mygov.scot pages set out the scheme rules¹. Business Debtline and National Debtline publish free guides on help with mortgage payments and on negative equity⁷. Housing Rights in Northern Ireland covers sorting out mortgage problems for readers there¹¹.

If you are facing repossession, the wider mortgage system has protections that apply before and during court action. Our guide to mortgage arrears explains what to do when payments cannot be met, and repossession in Scotland covers the sheriff court steps and your rights. The Home Owners' Support Fund page explains the other scheme in the same fund, Mortgage to Shared Equity, which is not open to homeowners in negative equity or to those who bought under shared ownership or shared equity⁷.