The Government has extended the financial help available to struggling homeowners who have been made redundant.

The improvements to the Support for Mortgage Interest (SMI) scheme, which came into effect today, reduce the waiting period for the benefit and ensure that a greater number of poorer borrowers will be able to get Government help.

The SMI scheme pays the interest portion of homeowner's monthly mortgage payments, with the aim of enabling borrowers in financial trouble to stay in their homes rather than face repossession. The Council of Mortgage Lenders estimates that the number of repossessions will soar to 75,000 next year as rising unemployment leaves growing numbers unable to meet interest payments.

Homeowners will now be able to apply for SMI from 13 weeks after redundancy, reduced from 39 weeks. A greater number of homeowners will also qualify for help after the threshold was raised to include mortgages of up to £200,000, increased from a maximum of £30,000 previously.

The new lower time limit will apply to those who have already made an application under the old rules.

James Purnell, the Work and Pensions Secretary, said: “We have changed the rules to make sure even more people can get help with their mortgage payments if they lose their job.

"Every time someone loses their job it is a personal tragedy. Jobcentre Plus is on hand to help people get back to work as quickly as possible, but we will do everything we can to give people the real help they need. That is why we will give financial help towards mortgage payments for someone while they are looking for a job.”

The SMI scheme only provides mortgage relief to those who are already receiving a means-tested benefit, such as income support, pension credit or income-based jobseekers allowance.

A second scheme is being finalised to allow householders to defer a proportion of their mortgage interest payments for up to two years.

Prime Minister Gordon Brown told the Commons last month that eight of the UK’s major lenders had signed up to the scheme, which would be covered by a Government guarantee.