No, in almost every case you cannot remortgage during an IVA to consolidate debt. An individual voluntary arrangement is a legally binding agreement with your creditors, supervised by an insolvency practitioner, and its standard terms stop you taking new credit above £500 without the practitioner's written consent. The only remortgage most IVAs allow is the equity release attempt in the final year, typically month 54 of a 60 month arrangement, and its purpose is to pay money into the IVA for your creditors, not to consolidate debt outside it.
A remortgage during an IVA needs the insolvency practitioner's consent, a lender willing to lend to someone in an active arrangement, and a purpose the arrangement allows. Consolidation fails all three. The one exception is the equity release your IVA may require in its final year.
- Standard IVA terms stop you taking credit of more than £500 without the insolvency practitioner's written consent.
- Most IVAs for homeowners include an equity clause requiring a remortgage attempt in the final year, usually month 54.
- Under the standard protocol the remortgage is capped at 85% loan to value and only required where your equity share exceeds £5,000.
- If a remortgage is not possible, the IVA is typically extended by up to 12 monthly contributions instead.
- An active IVA is visible on your credit file and the Individual Insolvency Register, so mainstream lenders decline.
- Checking your options will not affect your credit score.
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How lenders typically treat it
| What lenders look at | Typical position |
|---|---|
| Insolvency practitioner's consent | Required for any new borrowing over £500. Remortgaging without written consent breaches the arrangement. |
| Purpose: debt consolidation | Not permitted. Debts inside the IVA are dealt with through it, and repaying some creditors outside it is not allowed. |
| Purpose: equity release under the IVA's terms | The one remortgage the arrangement expects, in the final year, with the proceeds paid into the IVA. |
| Lenders willing to lend during an active IVA | A very small number of specialists, at low loan to value and high rates, and only with the practitioner's consent. |
| Maximum loan to value | The standard protocol caps the equity release remortgage at 85%; lenders that will lend usually cap far lower. |
| Affordability under the protocol | The increase in your mortgage payment is typically limited to a share of your monthly IVA contribution, commonly half. |
| If no remortgage is available | The IVA is usually extended by up to 12 months of contributions in place of the equity. |
| After completion | More lenders consider you from the completion certificate onwards, and more still once the entry leaves your file. |
A general guide to how the market behaves, not a promise about any lender. Criteria change and every case is assessed individually. See the lender criteria database for named lenders.
Why can you not remortgage during an IVA to consolidate debt?
Three things stand in the way, and any one would be enough. The first is the arrangement itself: a formal, legally binding agreement between you and your creditors, made under the Insolvency Act and supervised by a licensed insolvency practitioner. Its standard terms, based on the IVA Protocol most practitioners use, say you may not take on new credit above £500 without the practitioner's written consent. A remortgage is new credit, so it needs that consent, and a practitioner has no reason to give it for a purpose the arrangement does not recognise.
The second is the purpose. Debt consolidation means borrowing against your home to repay cards and loans. If those debts are inside the IVA, they are already being dealt with: your creditors have agreed to take your monthly contributions and to release you from whatever remains at the end. Borrowing to repay some of them in full outside the arrangement would breach the principle that all creditors are treated equally. Debts taken on since the IVA started may already be a breach and are a matter for the practitioner, not a lender.
The third is the market. An active IVA is recorded on your credit file and on the Individual Insolvency Register, which any lender can search. Mainstream lenders decline an active arrangement as a matter of policy, and the handful of specialists that will consider one do so at low loan to value, high rates and only with the practitioner's written consent, which will not be given for consolidation. Our guide comparing consolidation with an IVA is written for homeowners deciding between the two before entering an arrangement.
What is the equity clause in an IVA?
Most IVAs entered into by homeowners contain an equity clause, and it is the reason the word remortgage appears in the arrangement at all. Under the standard IVA Protocol terms, six months before the final scheduled contribution, typically month 54 of a 60 month arrangement, the practitioner obtains a valuation of your home. If your share of the equity, calculated after allowing for a mortgage at 85% of the property's value, is more than £5,000, you are required to try to release it by remortgaging, and the money raised is paid into the arrangement for your creditors.
The clause has limits designed to stop it pushing you into unaffordable borrowing. Typically the remortgage cannot exceed 85% loan to value, the term should not run beyond your existing mortgage term or state retirement age, and the increase in your monthly mortgage payment is capped at a proportion of your monthly IVA contribution, commonly half. The amount raised is also capped at what repays the creditors in full plus the practitioner's costs.
Two things follow. The equity release remortgage is not a consolidation remortgage: the proceeds go into the IVA, not to debts of your choosing. And whether it happens at all depends on the valuation and your share of the equity, which you do not control. If the valuation shows less than £5,000 of releasable equity, the clause is not triggered and the IVA runs to completion on contributions alone.
What does the equity release attempt actually involve?
The practitioner writes to you at the appropriate point and explains the valuation and the sum involved. From there the steps are those of any remortgage. You approach a broker, ideally one familiar with IVA cases, who checks the market for lenders willing to consider a borrower in an active arrangement. There are very few. Those that exist typically limit loan to value well below the 85% ceiling in the protocol, price for the risk with a rate far above mainstream remortgage rates, and require the practitioner's written consent before proceeding.
Costs come with the attempt. A valuation fee, broker fees and lender fees may all be payable even if the application fails, so ask the practitioner in advance how those are treated. If you are in a fixed rate mortgage, an early repayment charge for leaving it may also apply, and that charge counts against the equity released, which can mean the arithmetic no longer works.
In practice the attempt often ends with a broker's letter confirming that no suitable remortgage is available, which reflects the lending market for active arrangements rather than any failure on your part. The practitioner also has the option under the protocol of a secured loan in place of a remortgage where that is more workable, but again the funds go into the arrangement. Because every arrangement is drafted individually, read your own proposal and any creditor modifications before assuming the standard terms apply, and ask the practitioner to explain anything unclear.
What happens if you cannot release equity in the final year?
The standard answer is an extension. Where the practitioner is satisfied that no remortgage or secured loan is available on workable terms, the IVA is usually extended by up to 12 further monthly contributions in place of the equity. A 60 month arrangement therefore becomes a 72 month one, and you keep paying as before rather than borrowing a lump sum. Some arrangements allow a third party, such as a family member, to pay a sum equivalent to the equity instead, which brings the IVA to an end on the original date.
Once the final contribution is made, the practitioner issues a completion certificate, and you are released from the debts included in the arrangement. The credit file entry for the IVA stays for six years from the date the arrangement started, or until completion if that comes later, so a 60 month IVA drops off about a year after completion and an extended 72 month one on completion. Defaults recorded by creditors before the IVA follow their own six year clocks, so the file can take a little longer to clear.
What you do from there is a different question, and where borrowing against your home can return on your own terms. Our remortgage after an IVA page covers which lenders consider you from completion, what they ask for and how the picture improves once the entry leaves your file. Throughout, free and impartial advice is available from MoneyHelper, StepChange or Citizens Advice, and your practitioner remains your first point of contact while the arrangement runs.
What can you plan for once the IVA has completed?
Most people searching this question are also asking what comes after, so here is how a consolidation remortgage works in principle, with the caveat that it is only available once the IVA has completed and, at most lenders, some time after that. The example uses the fixed illustrative remortgage rate applied across this site and looks only at the £20,000 being added to the mortgage. It shows the mechanism, not a projection for anyone recently out of an IVA, who would be offered a higher rate if offered one at all.
Illustrative rates: The rates in this example are fictional and used only to show how the numbers work. They are not an offer. Your actual rate may be lower or higher and will depend on your circumstances, your property and the lender. Consolidating debt over a longer term can mean you pay more interest overall, even if your monthly payment falls.
| Position | Amount |
|---|---|
| Current monthly payments (credit cards £12,000 at 24.9% and a personal loan £8,000 at 12.9%) | £532/month |
| New payment on the £20,000 added to the mortgage (5.4% over 20 years) | £136/month |
| Total repayable on that £20,000 over the 20-year term | £32,748 |
The mechanism is simple: a much lower monthly payment, a longer term and a higher total repaid than the £20,000 borrowed. What the example does not show is the point of the IVA, which is that debts in the arrangement are released at the end rather than repaid over 20 years. If you are struggling with the contributions, the answer is a variation through your practitioner, not a remortgage. If you are considering an IVA and have not yet entered one, both routes deserve a proper comparison, because a remortgage or secured loan is secured on your home, and your home may be repossessed if you do not keep up the repayments. A qualified adviser, or StepChange or Citizens Advice for free, can help you weigh them.
What improves your chances
- Speak to your insolvency practitioner before approaching any lender; consent is required, and asking first avoids a breach.
- Read your own IVA proposal and any creditor modifications, since equity clause terms vary between arrangements.
- Keep every IVA contribution and mortgage payment on time; conduct through the arrangement is what lenders look at afterwards.
- Get an early idea of your home's value and your share of the equity so the final year holds no surprises.
- Check when your mortgage deal ends and what early repayment charge applies, in case an equity release is required.
- Ask the practitioner how a failed remortgage attempt is handled and whether an extension or a third party payment is an option.
Alternatives worth considering
If you are in an IVA and the contributions have become unaffordable, the route is a variation through your practitioner, not new borrowing. If you are a homeowner weighing an IVA against consolidation before committing, our guide to debt consolidation versus an IVA and our secured loans and IVAs page set out how the two compare. Once the arrangement has completed, our remortgage after an IVA page picks up the story. Free, impartial advice is available at every stage from MoneyHelper, StepChange and Citizens Advice.
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Frequently asked questions
Can I remortgage while I am in an IVA?
Almost never for debt consolidation. Standard IVA terms require your insolvency practitioner's written consent for any credit over £500, and very few lenders consider an active arrangement. The one remortgage most IVAs expect is the equity release attempt in the final year, with proceeds paid into the arrangement.
What is the equity clause in an IVA?
A standard term requiring a valuation around month 54 of a 60 month arrangement. If your share of the equity above an 85% loan to value mortgage exceeds £5,000, you must try to remortgage to release it. If no lender will lend, the IVA is usually extended by up to 12 months.
What happens if I cannot remortgage in the final year of my IVA?
Typically the arrangement is extended by up to 12 further monthly contributions in place of the equity, so a five year IVA becomes six. Some arrangements allow a third party to pay an equivalent sum instead. Your practitioner confirms which applies.
Can I remortgage to pay off my IVA early?
Only through your practitioner, who would need to put a full and final settlement offer to your creditors and consent to the borrowing. Lenders willing to lend to someone in an active IVA are rare and expensive, so in practice early settlement is more often funded by a third party than a remortgage.
Will my practitioner let me remortgage to consolidate other debts?
It is very unlikely. Debts inside the IVA must be dealt with through it, and paying some creditors in full outside the arrangement breaches the equal treatment your creditors agreed to. Debts taken on since the IVA began are themselves a problem to raise with the practitioner rather than a lender.
How long after an IVA can I remortgage?
Some specialist lenders consider you from the date of the completion certificate, usually at a reduced loan to value and higher rate. Many more become available once the IVA entry leaves your credit file, six years from the start date. Our remortgage after an IVA page has the detail.
Does checking my options affect my credit score?
No. Checking your options will not affect your credit score. Equiclear does not search your credit file, and any check the broker makes at this stage is a soft search, which other lenders cannot see. If you are in an IVA, speak to your practitioner before any lender, because a full application without consent can breach the arrangement.