Homeowners can keep their property during an IVA, but may need to release equity in year 5-6 through remortgaging or secured loans. This guide explains how equity release works and alternatives if remortgaging isn't possible.
Check Your EligibilityIVAs protect your property from forced sale, unlike bankruptcy which could force you to sell.
In year 5-6, attempt to remortgage or secure loan to release 85% of your equity share for creditors.
If remortgaging fails, make 12 extra monthly payments instead of releasing equity.
Most IVA proposals include an equity release clause requiring homeowners to attempt releasing equity around month 54 (year 5). This provides additional funds for creditors beyond monthly payments.
Your IP calculates your beneficial interest (ownership share) in the property:
Example (sole owner):
Example (joint owner with non-IVA partner):
Poor credit from the IVA makes remortgaging difficult. If you genuinely can't release equity after reasonable attempts, you make 12 additional monthly payments (typically extending IVA to 6 years total) instead of equity release.
If you sell voluntarily during the IVA, proceeds after mortgage repayment and selling costs go to your IP. You can keep enough for reasonable alternative accommodation deposit, but windfall rules apply to excess proceeds.
No, IVAs are designed to allow homeowners to keep their property. However, you may need to release equity (remortgage or secured loan) in year 5-6. If releasing equity isn't possible due to poor credit or insufficient equity, your IVA extends by 12 months of payments instead.
Around month 54 of your IVA (year 5), your IP assesses whether you have equity in your home. You'll attempt to release 85% of your share by remortgaging or secured loan. If you can't release equity, you make 12 extra monthly payments. This clause is in most IVA proposals.
An IVA doesn't place a charge on your property like a secured loan would. However, your beneficial interest (ownership share) is recorded as an asset in the IVA. If you sell during the IVA, proceeds above mortgage/selling costs must be paid to your IP for creditors.
Your home is protected during an IVA. You continue making mortgage payments as normal. The IVA only affects equity (the difference between property value and mortgage balance). If you're a homeowner with equity, this makes an IVA more attractive than bankruptcy, which could force sale.
Homeowners can get IVAs and often benefit more than renters. The equity release clause means creditors receive more than in bankruptcy, so they're more likely to approve the IVA. You keep your home, maintain normal life, and only deal with equity in year 5-6.
Essential assets like your home (up to reasonable value), car (if needed for work/essential travel), tools, and household items are protected in IVAs. Non-essential assets like second properties, valuable collections, or luxury vehicles may need to be sold and proceeds contributed to the IVA.
Find out if an IVA is right for you as a homeowner with our free eligibility assessment.
Check Eligibility NowWill you lose your home in an IVA? Complete guide for homeowners.
How an IVA affects your existing mortgage payments and terms.
Using equity release or remortgage to settle IVA early.
What happens if you sell your property or release equity during an IVA.
Managing property decisions and restrictions during your IVA term.
Getting a new mortgage after completing an IVA with property equity.