Homeowners hoping to avoid repossession under the Government's “mortgage holiday” proposals must meet a series of qualifying criteria that could mean fewer than 10,000 are likely to join the scheme.

The Homeowner Mortgage Support Scheme, which was announced last week by Gordon Brown, offers households that suffer a “significant and temporary loss of income” as a result of the recession the chance to defer a proportion of the interest payments on their mortgage for up to two years.

Yesterday the Treasury said that the scheme would be open only to households with a mortgage of less than £400,000, estimated to be about ten million borrowers.

About 1.7 million households will not qualify, including borrowers with a second charge against their home and those with a buy-to-let deal.

Borrowers who apply can also hold no more than £16,000 in savings and will need to already be in arrears on their monthly payments. It was also revealed that borrowers would be required to speak to a debt adviser, such as National Debtline or Citizens Advice, before approaching their lender.

Debt charities will be expected to assess whether a homeowner qualifies and to establish whether they will be able to begin repaying the debt in the near future. However, the final decision will rest with the lender.

Beccy Boden-Wilks, of the Money Advice Trust, the debt charity, said: “It is always positive to suggest that borrowers in debt should seek advice so we would welcome this measure.”

The Chancellor announced an extra £15 million for debt charities in the Pre-Budget Report. Approximately £5 million is going to the Money Advice Trust, which runs the National Debtline. It will be recruiting another 50 debt advisers next month.

Last night it emerged that the UK's eight biggest lenders, including HBOS — owner of Halifax — Abbey and HSBC had not offered concrete assurances that they would sign up to the scheme.

The lenders have agreed only “in principle” to the idea but are expected to come under further pressure at a meeting with ministers due today.

Louise Cuming, the head of mortgages at moneysupermarket.com, the comparison website, said: “The list of criteria that must be fulfilled before borrowers are even considered means that few will qualify and even fewer will actually be granted assistance due to the fact it is voluntary on behalf of the lenders, who have only signed up ‘in principle'.”

It is also estimated that sub-prime lenders, who are considered to be responsible for approximately half of all repossessions, will not join the scheme.

Ray Boulger, of the mortgage broker John Charcol, said: “Sub-prime lenders will certainly not be signing up to this deal. This scheme has all the hallmarks of a plan that has been cobbled together at the last minute.”

Last week Margaret Beckett, the Housing Minister, suggested that about 9,000 borrowers will take advantage of the scheme, despite estimates from the Council of Mortgage Lenders (CML), the trade body, that repossessions could top 75,000 next year.

There will be 200,000 households who are more than three months in arrears by the end of the year, according to the CML.

The Government is guaranteeing any loss experienced by lenders in the event that homeowners are not able to repay the interest that has been rolled forward.

Officials said that the Government's liabilities if people defaulted en masse could be £1 billion. However, the Treasury estimates that the more likely cost will be about £100 million.

Currently, overstretched borrowers with mortgages below £200,000 have their interest payments covered for two years if they are on benefits under the Income Support for Mortgage Interest scheme.