MY HOME Finance is a new Government project which offers an alternative to people who can’t ask High Street banks for a loan because of a poor credit rating.

The pilot scheme is being tested at 10 branches across the West Midlands in conjunction with the National Housing Federation and Royal Bank of Scotland.

Applicants must undertake a 45-minute interview to prove they have the capacity to repay loans.

The interest rate is 29.9%, reflecting higher admin costs due to in-depth customer appraisals and the monitoring of weekly repayments.

Andrew Hagger, at moneynet.co.uk, says: “My Home Finance is a cheaper and more attractive alternative to payday loans and unregulated loan sharks where interest costs can be crippling, particularly for those already on tight budgets.”

Although the number of new borrowers is falling fast, Drew Wotherspoon, at leading mortgage broker John Charcol, confirms a dramatic 35% surge in remortgages in September.

“Fixed rates made up just 27.5% of business in September, with variable rates the most popular products by some distance,” says Wotherspoon.

Chasing remortgaging business, Nationwide BS fixes over two, three and five years start at 4.09% (up to 70% loan to value) with no product fee, no valuation or legal fees, and a booking fee (non-refundable) of just £99.