Will an IVA affect my mortgage?

Assuming that you have kept up to date with your mortgage repayments, an IVA is unlikely to adversely affect your mortgage arrangements, as the lender will always look at your payment history as the principle assessment of ability to pay.

It is possible that for the life of the IVA, you may be asked to convert your mortgage to an interest only payment basis if this is possible, so that the contributions into the IVA can be maximised. This will mean that the capital balance of the mortgage will not reduce during the life of the IVA, and you should take advice from your financial adviser in this respect.

Where you currently have a mortgage which benefits from a fixed rate of interest or other arrangement which is likely to expire during the life of the IVA, the mortgage lender will usually contact you to offer you the option of a further fixed rate package or their standard variable rate. If you opt for one of the packages from your existing lender, your mortgage should continue as anticipated. However, if you decide to place your mortgage with another lender, they will carry out credit checks etc as part of their standard assessment arrangements, and through this will establish that you are in an IVA. In such a case, it is likely that, if the lender is prepared to lend to you, the interest rate offered will be at a higher level than if you were not in an IVA, and you may also find tighter criteria set with regard to the size of the mortgage against the value of the property.