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Mortgage after an IVA

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Mortgage after an IVA

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Last reviewed on 17th November 2023 by Martin Alexander (Mortgage Advisor)

We’re often asked if getting a mortgage with an IVA is possible. Although a mortgage after an IVA is possible, it depends on your circumstances. Selecting the right lender is crucial, as applicants with IVAs generally require specialist lenders, but this isn’t always necessary.

It can be challenging to get a mortgage with an IVA, never mind a great rate, but it is possible with the correct approach.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement with your creditors to pay all or some of your debts. You’d pay your debt to an insolvency practitioner to pay your creditors.

An insolvency practitioner will arrange your IVA by making a payment plan that suits your income. A court must approve and record your IVA on the Insolvency Register.

Once your creditors have accepted your IVA, charges and additional interest will freeze. Creditors will also be unable to demand payments from you during the IVA.

Any remaining debt after your IVA is typically written off, and you no longer owe creditors any money. The record of your IVA is then officially removed from the Insolvency Register.

Can I get a mortgage after an IVA?

You can get a mortgage after an IVA, and some lenders may accept you during your IVA. The key factors that lenders will assess are whether your IVA is ongoing and how long ago your IVA occurred. Waiting six years after your discharge can make a mortgage easier, but you can get one before this.

Ongoing IVA

You can get a mortgage with an ongoing IVA, but only a handful of specialist lenders will consider you. As you’ll have fewer lenders to approach, interest rates will likely be higher than average.

Lenders will check whether you’ve made your IVA payments on time. If you’re in arrears, a mortgage won’t be possible.

You’ll also need to be at least one year into your IVA so lenders can assess whether you’ve made your payments on time.

Discharged less than three years ago

You can get a mortgage if you were discharged from your IVA less than three years ago. However, you’ll need a specialist lender and likely pay higher rates and fees.

Getting a mortgage can make sense if you were discharged recently and can afford higher rates. You can then switch to a better rate once three years have passed from your discharge date.

If you’re approaching three years from your discharge date, it may be better to wait for a mortgage until three years have passed. Doing so will unlock more lenders and better rates.

Discharged between three and six years ago

A mortgage becomes easier three years after your IVA discharge date. 

You won’t have the pick of the bunch regarding lenders, but you’ll have more lenders to approach than if your discharge was less than three years ago.

Evidence that you settled your IVA will also work in your favour for a mortgage. You’ll need help finding a lender if you missed some IVA payments.

Discharged over six years ago

Once six years have passed, your IVA will drop off your credit file, making it easier to get a mortgage. You’ll have many lenders to approach, including some high-street lenders.

Being discharged from an IVA for over six years doesn’t mean you can apply with every lender. Some lenders don’t accept IVAs, even if they’re over six years old.

Although your IVA won’t be on your credit file, you must still disclose this to your mortgage advisor and lender. Failing to do so can result in problems during your application.

How does an IVA affect a mortgage?

An IVA will affect your mortgage as it will appear on your credit file when lenders carry out a credit check. Lenders will see the date when your IVA was registered, when it’s due to end and whether you’ve been paying on time.

Most lenders don’t accept IVAs as part of their criteria. If they accept IVAs, you must check whether you’ve been discharged long enough.

Having an IVA will likely mean you’ll pay higher mortgage rates than an applicant who’s never had an IVA. However, six years after discharge, you should qualify for the same rates as everybody else.

How to get a mortgage with an IVA

You can improve your chances of a mortgage with an IVA with the following steps:

  • Speak to a mortgage advisor – Your easiest route to a mortgage is speaking to an advisor. We can then assess the details of your IVA to find eligible lenders, as few will accept IVAs.
  • Check your credit file – You can view the dates of when your IVA was registered and calculate how long it’s been since your discharge. Doing this is crucial to determine which lenders you’ll qualify with.
  • Save for a higher deposit – As you have an IVA, lenders will consider you high risk. You can minimise the risk by saving for a higher deposit. Aim for at least a 10% deposit, but try for 20%-25% if you can.
  • Minimise your monthly outgoings – You’ll undergo an affordability assessment to check whether you can afford a mortgage. You can help your application with fewer monthly outgoings, especially if you still pay an IVA.
  • Improve your credit score – You can take quick and easy steps to boost your credit score. As you’ve had an IVA, repairing your credit score is something you’ll want to do.
  • Check the lenders you’re eligible for – Depending on when your IVA was registered, you’ll qualify with some lenders and not others. You’ll need to find a suitable lender before you can apply. An advisor can help you with this.

ask a mortgage broker

Which mortgage lenders accept IVAs?

Lender How long after my IVA can I apply for a mortgage?
Bluestone Will consider applicants during an IVA and after discharge
Norton Finance Accepts active IVAs, but applicants must have made at least 54 payments towards their IVA.
Metro Won’t accept an active IVA, and applicants must have been discharged for at least three years
Natwest Will only consider applicants that have been discharged from an IVA for over six years
Saffron Applicants must be discharged for at least three years
Nationwide Will consider applicants that have been discharged for three years
Barclays IVAs must be over six years old and no longer recorded on credit reports
Santander Do not accept any history of IVAs whatsoever

As you can see, each lender has different criteria. Speaking to an advisor before approaching a lender is crucial, as other aspects of your application need to be checked beforehand.

Can I get a mortgage if I’ve had other credit issues?

An IVA usually follows other credit issues, such as late payments, CCJs, and defaults. Having other marks on your credit file makes you a high risk to lenders.

Severe credit issues such as repossession will make it extremely difficult to get a mortgage, but it’s still possible!

Speak to an advisor who can check your credit file to see whether a mortgage is possible.

How long does an IVA stay on my credit file?

An IVA will stay on your credit file for six years from its registration date. If you settled your IVA in less time, it will still be evident on your credit file. Your IVA will drop off once you’ve paid your creditors AND six years have passed.

Typically, any credit issues registered over six years ago shouldn’t appear on your credit file. Lenders will ask you to declare if you’ve had credit issues not on your credit file, including whether you’ve ever entered an IVA.

Should I declare my IVA to a mortgage lender?

Never be dishonest to lenders, as this won’t do you any good now or in the future. You can still get a mortgage, even if your lender knows about your IVA.

Many borrowers assume that having a clean credit file will assure them of a mortgage, but this is untrue. Your mortgage could be declined even with a great credit score.

Mortgage with an IVA FAQs

If you’ve had an IVA, you’ll likely need a minimum 10% deposit, possibly more. That said, it all depends on how recent your IVA was.

If your IVA was over six years ago, you may qualify with a 5% deposit. You’ll likely need a 15% deposit if your IVA was recent. Each case is unique, so speaking to an advisor for a more accurate answer is best.

You may need a specialist lender to get a mortgage after an IVA. Specialist lenders can offer mortgages to borrowers in an active IVA or have had a past IVA.

Each mortgage application varies. Lenders assess each case individually, so there isn’t one correct answer for everyone. You may be offered some great rates without needing a large deposit.

Applying for a mortgage after you’ve settled your IVA will improve your mortgage chances. You’ll have more lenders to approach and better rates to compare.

Getting a mortgage during an active IVA is still possible, although it will be much harder.

An IVA will stay on your credit file for up to six years. Your credit file will contain your last six years of credit history, which lenders will see during a credit check.

Having an IVA on your credit file can make getting any loan or mortgage difficult.

Once your IVA has come to an end, your insolvency practitioner will inform you in writing. You’ll get a completion certificate, a formal document outlining the end of your IVA. You’ll then be discharged from your IVA, and your debt with your creditors will be settled.

Once you have the certificate, check your credit file to ensure it’s been updated.

Your credit score will improve with time after your IVA. You must ensure you don’t run into further credit issues while your IVA is active.

Read more: How can I improve my credit score?


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About the author

Martin Alexander
Senior Mortgage Advisor | More Articles

Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.