Can you get a mortgage with an IVA?
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Home » Bad Credit Mortgage Broker » Can you get a mortgage with an IVA?
Can you get a mortgage with an IVA? (Part 1)
Sam Bull explains how the mortgage process works if you have an IVA. Episode one of two, recorded in January 2024.
What is an IVA? How does an IVA work?
An IVA – or an individual voluntary arrangement – is a legally binding agreement between you and your creditors to pay back your debts over five or six years.
People who enter an IVA usually do so when they can no longer afford to pay back their debts. An insolvency practitioner will run through your finances and work out how much you can afford to pay and over what period.
Can you get a mortgage with an IVA? How long after an IVA can I get a mortgage?
You can get a mortgage with an IVA. Most applicants will be considered for a mortgage with the majority of lenders as long as their IVA has been discharged, or settled, for over three years.
Some mortgage lenders allow applicants to have been discharged for two years, others allow one year – and there are even one or two specialist mortgage lenders who consider applicants that have had satisfactory conduct for their IVA for only six months.
In this case, they can still be in their IVA. Each applicant would be considered on their own merits and they would need quite a large deposit, usually around 30%, if they are still within their IVA period.
What are the lending criteria for a mortgage with an IVA? Are there any differences here?
The most important criteria for applicants with an IVA is the length of time that has passed since the IVA was satisfied. Most mortgage lenders want at least three years to have passed, with the odd exception.
Lenders will usually want to see that all the payments have been made on time during that IVA, and also that you have maintained a clean credit file since being discharged.
How much can you borrow with an IVA? What deposit will you need for a mortgage with an IVA?
Applicants with an IVA can expect to borrow around 4.5 times their combined income, although some mortgage lenders can lend up to 5.5 times income – but this will depend on the expenditure in the background.
Applicants who have had an IVA will need a minimum of a 5% deposit for a new mortgage. This will vary between mortgage lenders, and in line with how long the IVA has been satisfied.
So the minimum deposit is 5%, but depending on the mortgage lender, it may be as much as a 30% deposit if the IVA has not yet been settled.
Can you pass a credit check with an IVA?
Yes, you can pass a credit check with an IVA, although it’s important not to just run a credit check with mortgage lenders that have the best interest rates on the market.
As a mortgage broker, we would carry out a full fact find with any applicant. We would get the full information about the IVA – when it was registered, when it was satisfied and the account conduct of the IVA.
We’d then be able to then make a mortgage recommendation, finding a suitable lender that’s happy with that person’s criteria. There would usually be a credit check done at that point, as part of the application process.
Do I have to declare an IVA on my mortgage application?
Yes, you will need to declare if you have had an IVA or any other credit history issues on any mortgage application. It’s always best to provide your mortgage broker with full and accurate information up front – that will give you the best chance of your mortgage application being approved.
Will I need to pay a larger deposit or higher interest rates for a mortgage with an IVA?
This will depend on when the IVA was registered and how long the applicant has been discharged. Applicants that have been discharged for over six years can expect to get a mortgage on high street terms with competitive interest rates and standard deposit levels – so a minimum of 5% deposit.
Applicants that have been discharged for over three years can usually expect to pay slightly more than average high street mortgage terms, but they should be able to proceed with the minimum 5% deposit level.
For people still in their IVA, and it’s not yet been discharged, you would expect a minimum deposit of 30%. Interest rates will be higher than standard high street terms.
How long does an IVA last? How long does an IVA stay on your credit file?
An IVA usually lasts for five years, but it can be extended by another 12 months, depending on the insolvency practitioner and their affordability checks.
However, your credit report has a rolling six-year history, so an IVA will stay on your credit report for six years, starting from the date it was approved.
Does an IVA affect your credit history? How badly does an IVA affect your credit rating?
It will affect your credit history because it will stay on your record for the next six years, and reduce your credit score throughout that time. It’s very important to make sure that all your IVA payments are made on time.
How can I improve my credit score after an IVA?
You need to maintain your payments on any other credit commitments that you have, such as your mobile phone bill, your broadband and your utility bills. Those all usually have a footprint on your credit score. Maintaining payments on all your other commitments could mitigate the negative effects to your credit score resulting from the IVA.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
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Can you get a mortgage with an IVA? (Part 2)
We continue the conversation on mortgages and IVAs with Sam Bull. Episode two of two, recorded in January 2025.
Can you remortgage with an IVA?
Yes, you can remortgage with an IVA, depending on when it was registered and, if you’ve been discharged from your IVA, how long ago. That will influence the best deals that you qualify for.What do I need to prove my IVA has been discharged?
Once your IVA has ended you’ll receive an IVA completion certificate. You can provide this to the mortgage lender as proof that the IVA has been discharged.You can also send a copy of your completion certificate to the credit reference agencies such as Experian, Equifax and TransUnion. They can then update their records and mark the IVA is satisfied.
Do I have to wait six years from when my IVA is discharged to get a higher loan to value?
There are mortgage lenders who can offer higher Loan to Value mortgages to applicants whose IVAs have been satisfied for at least three years. So no, you don’t need to wait the full six years from the IVA being discharged.Can I get a joint mortgage with an IVA?
Yes, you can get a joint mortgage with an IVA. Mortgage lenders will assess the application based on the worst credit history of the two applicants. The full mortgage application will need to meet the lender’s criteria based on the IVA.How do I get a mortgage during an IVA?
While most mortgage lenders will require your IVA to have been satisfied for at least three years, some can lend before this and even whilst you are actually currently in the IVA.This will be subject to satisfactory account conduct within the IVA. It would definitely require a larger deposit of at least 30%. These mortgages are all done on a case by case basis.
Do I have to declare an IVA when applying for a mortgage in the future?
It’s best practice to always declare the details of your IVA to your mortgage broker, regardless of when it was registered or satisfied. Your broker will then be able to make the correct declarations on any mortgage application being submitted.Can I get a Right to Buy mortgage with an IVA?
Yes, you can get a Right to Buy mortgage with an IVA. This will be subject to the normal credit checks and passing the mortgage lender’s criteria.Can I get a shared ownership mortgage with an IVA as well?
For the shared ownership scheme, if you have an IVA it would just be subject to the normal IVA lending criteria. The same principles apply – you generally need to have been discharged for a minimum of three years.Will all lenders allow you to borrow money when you’ve had an IVA? Which lenders can provide a mortgage with an IVA?
Not all mortgage lenders will lend to applicants who have had an IVA, although there are plenty who will. Lenders such as HSBC, Nationwide, Skipton, Metro Bank and Aldermore are all at the moment happy to lend to applicants who have had IVAs discharged for three years [information correct at the time of recording in January 2025].How can a mortgage advisor or mortgage broker help with IVAs?
When an applicant has had an IVA in the past, it can be quite complicated to apply for a mortgage, especially with the different dates involved – including when the IVA was registered and then discharged.Finding the right mortgage lender can be challenging. So working with a mortgage broker that has good experience in helping people with IVAs in the past would be very valuable.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.