If your IVA follows the current 2025 IVA Protocol, you will not normally be required to sell your home or release its equity to fund the IVA. Instead, the level of your beneficial interest in the family home can affect whether the IVA lasts for 60 or 72 months.

Exactly what happens depends on your circumstances, the equity available in your property and the terms of your IVA.

Can I keep my house if I have an IVA?

In most cases, yes.

An IVA is designed to allow homeowners to remain in their property while making an affordable contribution towards their unsecured debts.

Your mortgage and other secured household costs are considered as part of your income and expenditure assessment. This means the IVA should be structured around what you can reasonably afford after essential household expenses have been taken into account.

Your home is different from unsecured assets because your mortgage is secured against the property. Your mortgage payments therefore continue separately from your IVA payments.

However, the equity in your property is important.

Under the 2025 Protocol, the equity in your family home is used to determine the length of a protocol IVA rather than being realised as part of the arrangement. If your individual beneficial interest is £10,000 or more, the standard protocol IVA will normally last 72 months instead of 60 months.

What happens to my house when I enter an IVA?

Your home does not automatically become the property of your IVA supervisor or your creditors.

You remain the owner and can continue living in your home.

The important question is how much equity you have in the property.

Equity is broadly the value of your property after taking account of your mortgage, secured loans and relevant interests belonging to other owners.

Your equity position can affect the terms of your IVA and what your creditors expect to receive.

Can I get an IVA if I have equity in my home?

Yes.

Having equity in your property does not automatically prevent you from entering an IVA.

An IVA is based on your overall financial circumstances, including your income, expenditure, debts and assets.

Even if you have equity, an IVA may still be possible. However, if the equity in your family home is very high, a protocol IVA may not be appropriate and a bespoke IVA or another debt solution may need to be considered.

The important point is that your creditors will want to understand how much equity is available and compare the proposed IVA with the likely outcome of alternatives such as bankruptcy.

How is home equity calculated for an IVA?

Your property will normally need to be valued so that the available equity can be assessed.

A simplified example would be:

Property value: £350,000
85% of property value: £297,500
Outstanding Mortgage: £227,500
Remaining equity: £70,000

If you own the property jointly with another person, their interest in the property may also need to be taken into account.

For example, if the remaining equity is £70,000 and the relevant ownership share is 50%, the equity attributable to you would be £35,000.

The actual calculation can depend on the ownership arrangements, secured borrowing and the terms applicable to your IVA.

Why is 85% of my home's value used?

The current IVA approach can use 85% of the property's market value when assessing available equity.

There are several reasons for this.

One is that homeowners should not normally be expected to borrow against virtually the entire value of their property. Retaining a proportion of the property's value provides some protection against future falls in house prices and avoids putting the homeowner in an unnecessarily vulnerable position.

The calculation can also be relevant when comparing the potential return to creditors from an IVA with what creditors might receive if the homeowner were made bankrupt.

A bankruptcy calculation may need to take account of costs associated with selling and dealing with a property, meaning that simply assuming the full market value would be available to creditors would not necessarily provide a realistic comparison.

Will I have to remortgage my house during an IVA?

Possibly, but you will not normally be expected to sell your home.

Under the 2025 Protocol, a protocol IVA does not include a requirement for you to realise your interest in the family home. However, where your individual beneficial interest is £10,000 or more, the proposal should explain why excluding the home is reasonable in your circumstances. This can include factors such as your ability to access secured lending, the age of household occupants and the financial sustainability of the household if you were required to sell or relocate.

When do I have to release equity in an IVA?

If your IVA follows the current 2025 IVA Protocol, you will not normally be required to sell your home or release equity from it to fund the IVA.

Instead, the amount of equity in your home can affect the length of the arrangement.

The protocol calculates available equity using 85% of the property's value less secured borrowing such as your mortgage. If your individual beneficial interest is £10,000 or more, the standard protocol IVA will normally last 72 months rather than 60 months.

What if I can't remortgage my house?

There are several reasons why you may not be able to release equity.

For example:

• You may not qualify for a suitable mortgage.
• A lender may refuse the application.
• The available equity may be insufficient.
• A joint owner may not agree to the borrowing.
• The additional mortgage or secured-loan payment may be unaffordable.

If your IVA follows the 2025 Protocol, you do not normally have to release the equity in your family home. Where your individual beneficial interest is £10,000 or more, the usual protocol approach is a 72-month IVA instead of a 60-month IVA.

If you have a bespoke IVA rather than a protocol IVA, the terms may be different, so you should check your proposal and speak to your Insolvency Practitioner.

Will I have to sell my house if I have an IVA?

An IVA does not normally require you to sell your home.

This is one of the important differences between an IVA and bankruptcy.

Under the 2025 Protocol, you do not normally have to sell your family home or release its equity to fund the IVA. If your individual beneficial interest is £10,000 or more, the usual protocol approach is to extend the IVA to 72 months instead.

The exact position depends on the terms of your IVA.

What happens if my house increases in value during my IVA?

Under the 2025 Protocol, there is no requirement for a further review of the equity value once the protocol IVA is in force. The property valuation obtained before, or at the start of, the arrangement is used to determine the applicable beneficial interest and whether the IVA is normally 60 or 72 months.

What if my house falls in value?

For a protocol IVA, the property should be valued before or at the commencement of the arrangement, and the valuation should be verified by the Insolvency Practitioner. The 2025 Protocol does not require a further review of the equity value once the IVA is in force.

Does an IVA protect my home from creditors?

An IVA can provide protection from the unsecured creditors included in the arrangement, provided the IVA is approved and you comply with its terms.

However, an IVA does not remove your responsibility for secured borrowing such as your mortgage.

You must continue to maintain payments on debts and household bills that are not included in the IVA.

Failing to maintain your mortgage could still put your home at risk of repossession.

What happens to my mortgage during an IVA?

Your mortgage normally continues as usual.

Your mortgage is secured against your property and is treated differently from the unsecured debts included in your IVA.

Your mortgage payment should therefore be included when your affordability is assessed.

You need to continue making your contractual mortgage payments throughout the IVA.

If you are struggling to maintain your mortgage, tell your IVA supervisor as soon as possible and seek appropriate advice.

IVA and your home: frequently asked questions

Get advice about an IVA and your home

If you own your home and are considering an IVA, the amount of equity you have is an important part of assessing whether an IVA is suitable.

A proper assessment should consider your property's current value, mortgage and other secured borrowing, ownership arrangements, income and expenditure and the alternatives available to you.

An IVA may not be suitable for everyone. Fees apply and an IVA can affect your credit rating. Under the 2025 Protocol, homeowners do not normally have to realise the family home, but the amount of beneficial interest can affect the length of the arrangement. A bespoke IVA may have different terms.

If you're considering an IVA, make sure you understand how it could affect both your debts and your home before making a decision.