Mervyn Spence, 55, took the drastic step after he was unable to meet the £1,400-a-month repayments with Britain’s biggest building society Nationwide.
The former bass player with Wishbone Ash, who had a string of hits in the 1970s, said the company had refused to cut the 5.5 per cent interest rate he has been stuck with since 2008.
The father-of-two even sold two of his prized guitars in 2010 to keep up with his repayments before he fell further behind in 2013.
Nationwide then took him to court in January last year and a judge ruled they had the right to sell the two-bedroom detached house in Lichfield, Staffordshire, where he lives on his own.
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The building society sent a “team of heavies” to clear out the £225,000 property and lock the front door last week, he claimed. But Mr Spence is refusing to budge and has been holed up in the attic of the house’s barn conversion, which he uses as a recording studio, since Thursday.
Mr Spence said: “I had always been on a tracker mortgage and Nationwide phoned me up and said we will put you on a normal rate in 2008. Then the rates dropped in 2009 to an all-time low and I thought, great, but my rate stayed at 5.5 per cent. There was no leeway at all. I’ve asked them and I’ve been complaining about it while I try and keep my head above water.
“I had to sell some guitars in 2010; I had a Fender Precision which I’d had since the 1970s and sold for about £1,200 to £1,500. The last payments I made were at the end of 2013 but I couldn’t afford to make the full £1,400.
He added: “My head was full of other things because I had £150,000 commitments to make – the last thing I thought about was the best mortgage deal.
“I put a bag together and have been in the attic since last week when they locked the house. There is no heating so it has been freezing but I keep my spirits up playing the guitar and writing songs. Friends have been helping me out and I’m eating sandwiches and fruit.
“I’m going to stay here as long as it takes. I don’t care how much I stink – I’m prepared to be a rebel with a kind heart. If they drag me out of here, which I’m sure it will come to at some stage, I will be back down to their head office protesting. I hold them responsible and if they are going to make me homeless then I will become their responsibility.”
Mr Spence, who is also a former member of the 1970s act Trapeze, ran into financial problems in 2008 after a festival he organised was cancelled because of flooding.
His £150,000 losses meant he was unable to get a mortgage with another company and was locked into his Nationwide deal. He claims the building society is now selling the property for £160,000.
Nationwide said it had tried to come to a workable solution with Mr Spence since his account first fell into arrears in 2010.
A spokesperson said his rate was “completely fair and reasonable”, adding: “We have shown significant forbearance over a long period of time and have tried to do our best for Mr Spence. We are on Mr Spence’s side but, for the wider membership, we need to be on their side too, and we will make sure we are.”