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Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
Having a mortgage does not stop you setting up an IVA (individual voluntary arrangement). An IVA is designed to deal with unsecured debts, such as credit cards, personal loans and overdrafts, while your mortgage is a secured debt that sits outside the arrangement. Your mortgage payment is still taken into account when working out what you can afford to pay into the IVA each month.
This is a common source of confusion, so it’s worth being clear on how the two are treated separately, and what can happen if mortgage arrears are already part of the picture.
Why your mortgage isn’t part of the IVA itself
An IVA covers unsecured debts: money owed with nothing specific held as security against it. A mortgage is secured against your home, which means the lender has a legal charge over the property itself. Because of that difference, IVAs are built around unsecured borrowing, and your mortgage is treated as an ongoing living cost rather than a debt to be included and reduced.
Our guide on secured and unsecured debt explains this distinction in more detail, including why it matters for how different debts are dealt with.
| Included in an IVA | Treated as a living cost | |
|---|---|---|
| Credit cards | Usually yes | No |
| Personal loans | Usually yes | No |
| Overdrafts | Usually yes | No |
| Mortgage payments | No | Yes, factored into your budget |
| Mortgage arrears | Not written off, but may be discussed with your IP | Yes, as a priority payment |
How your mortgage affects what you can afford to pay
When an insolvency practitioner (IP) works out your IVA proposal, they start with your income and reasonable living costs, including your mortgage payment, council tax, utilities and food. What’s left over becomes the amount available for your monthly IVA payment. A higher mortgage payment leaves less spare income, which can affect how much is offered to your unsecured creditors and, in turn, whether they’re likely to approve the proposal.
This is one reason an accurate, honest budget matters at the proposal stage. Overstating your mortgage costs, or any other outgoing, can undermine the arrangement later if it doesn’t match reality, and creditors or your supervisor may ask for evidence such as mortgage statements to confirm the figures.
If your mortgage payment changes during the IVA, for example after a rate change on renewal, it’s worth telling your supervisor promptly, since a significant shift in your outgoings can affect whether the agreed payment is still realistic.
What if you already have mortgage arrears?
Mortgage arrears are a priority debt, which means they’re treated differently from the unsecured debts an IVA is built to deal with. Your IP will usually want to know about any arrears so they can be factored into your budget, but the IVA itself doesn’t write off or restructure the arrears. You would still need to address them with your lender, often alongside starting the IVA.
If arrears are a live concern, our page on remortgaging with mortgage arrears and our guide on remortgaging with mortgage arrears cover what lenders and advisers typically look for, and talking to your lender early is worth doing regardless of whether an IVA is also in place.
Joint mortgages and IVAs
An IVA is a personal arrangement, so if you’re on a joint mortgage and only one of you has unsecured debts that need dealing with, it’s usually only that person who enters the IVA. The other person’s own credit file and finances shouldn’t be directly affected, though the household still needs to keep meeting the joint mortgage payment. Our page on IVA with a joint mortgage looks at this situation in more depth, including what a lender may want to see from the partner without the IVA.
Will your mortgage lender find out?
Not automatically at the point you enter an IVA, but your lender may become aware of it in a few ways. It appears on your credit file, which lenders can review at various points, including if you apply for a further advance, switch products, or remortgage. It’s also recorded on the Insolvency Register while it runs. Because of this, it’s rarely something that stays hidden for the life of the arrangement, and many IVAs specifically require you to get your supervisor’s agreement before taking on new borrowing or changing your mortgage.
What this means if you want to remortgage with a mortgage already in place
If you already have a mortgage and enter an IVA, remortgaging while the arrangement is active usually needs your supervisor’s agreement, since any change to your mortgage can affect what’s available to your creditors. Our page on remortgaging during an IVA explains what this typically involves.
Once the IVA has completed, more lenders may consider an application, though the entry stays on your credit file for 6 years from when it started. Our remortgage after an IVA hub covers both stages, and it’s also worth checking whether you need to formally declare the IVA on any mortgage application, covered in our guide on declaring an IVA on a mortgage application.
Where to get help
If you’re weighing up an IVA while you have a mortgage, particularly if arrears are involved, free and impartial advice is available from MoneyHelper, StepChange and National Debtline. They can talk through how an IVA would sit alongside your mortgage before you commit to a proposal.
Frequently asked questions
Is my mortgage included in my IVA?
Usually not. An IVA is designed for unsecured debts such as credit cards, loans and overdrafts. Your mortgage is a secured debt, so it normally sits outside the arrangement, though your mortgage payment is factored into the budget that decides what you can afford to pay in.
Will my mortgage lender be told about my IVA?
Not automatically, but your lender may find out. Your credit file will show the IVA, and lenders review this at renewal or if you apply for a further advance or a new deal, which is one reason many IVAs need supervisor agreement before you remortgage.
Can I get an IVA if I already have mortgage arrears?
It's possible, but arrears are treated as a priority debt to keep paying, not something the IVA writes off. Your insolvency practitioner will look at your mortgage arrears alongside your other outgoings when working out an affordable plan. See remortgaging with mortgage arrears.
What if only one of us on a joint mortgage needs an IVA?
An IVA is personal, so if only one partner has qualifying unsecured debts, it should only affect that person's arrangement and credit file. The joint mortgage itself, and the other person's ability to keep meeting it, still needs looking at separately. See IVA with a joint mortgage.