IVAs · 4 min read
IVAs and your home: equity release, extensions and what to expect
Homeowners can usually keep their home in an IVA, but may be asked to release equity towards the end. How equity release works, what happens if you can't remortgage, and how an IVA compares with bankruptcy for homeowners.
- Fact-checked
- Against official sources
- Last updated
- Next review due
- April 2027
- Applies to
- England and Wales
- Sources
- 3 listed on this page
Independent guidance, not a government service. This page is general information about the law in England and Wales, not financial or legal advice. Debt solutions have fees, risks and consequences. For free, impartial advice, contact MoneyHelper or a debt charity.
The short answer
In an IVA you usually keep your home, and you must keep paying your mortgage. If you have equity, you’ll normally be asked to try to release some of it (usually by remortgaging) towards the end of the IVA, with the money going to your creditors. If you can’t remortgage, the IVA is usually extended by up to 12 months instead. This is one reason IVAs are often chosen by homeowners over bankruptcy.
Your mortgage during an IVA
Your mortgage is a secured debt, so it isn’t included in the IVA. You must keep paying it, and your mortgage payment is treated as an essential cost when working out what you can afford for the IVA. Mortgage arrears are a priority – read priority debts.
Equity release
Equity is the value of your home minus what’s owed on mortgages and secured loans. If you have equity, the IVA terms will usually say that towards the end, often in the final year, you must try to:
- remortgage to release some of your share of the equity, up to a limit set in the IVA terms
- pay that money into the IVA for your creditors
The details, including any limits on how much your monthly mortgage can rise, are set out in your IVA proposal. Read them carefully and ask questions before you agree.
If you can’t remortgage
Many people can’t get a new mortgage while in an IVA, or the equity is too small. In that case, the IVA terms usually say the IVA will be extended by up to 12 months of extra payments instead. That’s why IVAs for homeowners often last six years rather than five.
Small or no equity
If you have little or no equity, an equity release may not be required. The adviser should explain this based on a valuation.
Joint owners
If you own your home with someone who isn’t in the IVA, only your share of the equity is considered. Your co-owner isn’t bound by your IVA, but they may be affected by any remortgage.
IVA vs bankruptcy for homeowners
| IVA | Bankruptcy | |
|---|---|---|
| Can you keep your home? | Usually, yes | Your share may be sold or bought out by family |
| Equity | Usually released by remortgaging near the end | The trustee deals with your share of the equity |
| Length | Usually 5–6 years | Usually 12 months, but the home may be dealt with over several years |
| Cost | Fees from payments | £680 application fee |
Read IVA vs bankruptcy.
Other things homeowners should know
- Secured debts like a mortgage or secured loan aren’t in the IVA, so keep paying them.
- Charging orders already registered on your home stay in place; your adviser will explain how they’re dealt with. See charging orders.
- Selling during an IVA is possible, but you’ll usually need to pay your share of the equity into the IVA.
Frequently asked questions
Will I lose my house in an IVA?
You won’t usually be forced to sell your home in an IVA. You may be asked to release equity by remortgaging, or to extend the IVA.
Do I have to remortgage in an IVA?
You’ll usually be asked to try, if you have enough equity. If you can’t get a remortgage, the IVA is usually extended instead.
Can I move house during an IVA?
It’s possible, but you’ll need the supervisor’s agreement and any equity may need to be paid into the IVA.
Sources
How we wrote this article
- Research: written from primary sources such as legislation.gov.uk, GOV.UK and the Insolvency Service, then fact-checked by a second member of our team. The sources are listed above.
- Checked: last checked on . Next review due April 2027, or sooner if the rules change.
- Scope: applies to England and Wales. If you live in Scotland or Northern Ireland, read our Scotland and Northern Ireland guide. It is general information, not personal advice.
- Independence: we are not a government website or service, and we are not connected to any council, court or enforcement company.
- Money: we may receive a fee if we introduce you to a debt advice firm. This doesn't change what we write. How we're paid.
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