This page is about raising money for your own purposes, such as home improvements or helping family, once your IVA has completed, rather than about the equity clause many IVAs include for creditors. If your IVA is still active and you have been asked to try to release equity as part of it, remortgaging to pay off an IVA explains how that works and why the money usually goes to your creditors, not to you.
Once an IVA has ended, whether by completing or otherwise, releasing equity for your own use is assessed in broadly the same way as any raise-capital remortgage with adverse credit: your loan to value, affordability and the IVA’s age all come into it.
On this page
This page covers
- Credit issue
- Individual voluntary arrangements (IVAs)Usually stays on your credit file for 6 years from the start date.
- Reason for remortgaging
- Raising moneyBorrowing more increases your loan to value, which can change the options available.
Read the main guide: Remortgaging to release equity when you have bad credit
In short
- This is about raising money for yourself after an IVA has ended, not the equity clause many IVAs use for creditors during the arrangement.
- An IVA stays on your credit file for 6 years from its start date, even once it has completed.
- How long ago the IVA started, and whether it completed as planned, both affect what a lender may offer.
- A larger raise-capital request increases your loan to value at the same time your file shows a past IVA.
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.
How is this different from an IVA’s equity release clause?
Many IVAs require you to try to release equity from your home, usually in the final months of the arrangement, with the money going to your creditors rather than to you. That is a different situation from wanting to raise money for your own use once the IVA has ended. This page covers the second situation. If you are still in an IVA and unsure which applies to you, check your own IVA terms or ask your supervisor, and see remortgaging during an IVA for the wider picture.
Does a completed IVA still affect a raise-capital remortgage?
Yes. The IVA stays on your credit file for 6 years from its start date, whether it completed on time, early or was extended. Some lenders specialise in lending to people with a past IVA, and how long ago it started, and whether it completed as planned, both tend to matter more than the fact an IVA happened at all.
| IVA history | What some lenders may look for |
|---|---|
| Completed within the last year | Often the most cautious category; fewer lenders may consider extra borrowing |
| Completed 1 to 3 years ago | More lenders tend to open up as time passes |
| Completed over 3 years ago | Can be viewed more favourably, though the IVA still shows for 6 years |
| Failed rather than completed | Usually viewed more cautiously than a completed IVA |
Illustrative only. This is not the criteria of any specific lender.
If your IVA did not complete as planned, a failed IVA sets out how that tends to be viewed differently from a completed one.
Does raising money change what a lender asks about the IVA?
It can. Because raising money increases your loan to value at the same time your file shows a past IVA, a lender may ask more detailed questions about how it ended and how your finances have been managed since, compared with someone remortgaging without borrowing extra. Being able to show a settled pattern of managing money well since the IVA ended, alongside a clear reason for the new borrowing, tends to help.
The amount you want to raise also matters. A smaller request keeps your loan to value lower and can leave more lenders open to considering the application than a request closer to the maximum a lender would otherwise allow.
What should you weigh up before raising money after an IVA?
An IVA is designed to bring unmanageable debt under control. Taking on new borrowing secured against your home afterwards, even for a good reason, is a new commitment that needs to be affordable in its own right, on top of your existing mortgage.
- How settled your finances have been since the IVA ended, which some lenders may look at closely.
- Whether the amount is genuinely needed, rather than borrowing a round figure.
- Your existing mortgage payment history, since a clean record can help alongside a past IVA.
- Getting free advice first if you are at all unsure, from MoneyHelper or StepChange.
Getting advice
A specialist adviser who works with lenders that consider applications after an IVA can help you understand realistically how much you may be able to raise and how the IVA’s age is likely to be viewed, before you commit to an application and a hard credit search.
What may affect releasing equity after an IVA
| Factor | Why it matters |
|---|---|
| How the IVA ended | Completing as planned is usually viewed more favourably than a failed or extended arrangement. |
| How long ago the IVA started | More lenders tend to consider extra borrowing as time passes, though the IVA shows for 6 years from the start date. |
| Amount you want to raise | A larger raise-capital request increases both your borrowing and your loan to value. |
| Maximum LTV for raise-capital after an IVA | Some lenders set this lower than for a like-for-like remortgage. |
| Mortgage and other payment history since | A settled record since the IVA ended can help support the application. |
| What the money is for | Some lenders ask about the purpose specifically alongside a past IVA. |
| Whether the IVA involved a joint mortgage | See IVA with a joint mortgage if this applies to you. |
| Affordability of the larger mortgage | The new amount still has to pass an affordability check and stress test. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- The start and end dates of the IVA, and how it ended
- How much you want to raise and what it is for
- Your current mortgage balance, deal end date and any early repayment charges
- An estimate of your property’s current value
- Your credit reports from Experian, Equifax and TransUnion
- Proof of income and your main monthly outgoings
Frequently asked questions
Can I release equity for myself once my IVA has completed?
It can be possible, though fewer lenders may consider it soon after completion, and how much you can raise depends on your loan to value and affordability, alongside the IVA’s age.
How is this different from the equity release clause in my IVA?
The clause many IVAs include is about raising money for your creditors, usually near the end of the arrangement. This page is about raising money for your own purposes once the IVA has already ended.
Does it matter if my IVA was extended rather than completing on time?
It can be viewed slightly differently, though an extension to try to release equity is a fairly common reason, and does not necessarily count against you in the same way a failed IVA might.
Will a lender ask why I want to raise money after an IVA?
Many will, more so than for a like-for-like remortgage, since raising money increases your loan to value at the same time your file shows a past IVA. Being clear about the purpose tends to help the application.