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IVAs and your home: the 2025 Protocol rules

From 1 July 2025, protocol IVAs stopped touching the family home — no equity release, no year-five remortgage. What changed, exactly how the £10,000 test works, and why anyone already in an IVA must read their own proposal instead of this page.

Written by The My Debt Cleared editorial teamLast reviewed 13 September 2026Next review 13 March 2027Editorial policy
Under the 2025 IVA Protocol — the framework for straightforward consumer IVAs proposed from 1 July 2025 — your family home is excluded from the arrangement. There is no requirement to put equity in, to remortgage, or to sell. Instead, your beneficial interest is assessed once, before the IVA starts: take 85% of the property’s value, deduct secured borrowing, and for joint owners take your share alone. Under £10,000, it is disregarded and the standard term is 60 months. £10,000 or more, and the arrangement is proposed at 72 months instead of 60 — twelve further monthly payments in place of all the equity. That is the entire mechanism. The term is fixed at the outset, with no revaluation during the arrangement and no end-of-term equity assessment in a protocol IVA.

The £10,000 test, worked through

The calculation is deliberately mechanical. A home worth £200,000 with a £150,000 mortgage: 85% of value is £170,000, less the mortgage leaves £20,000 of relevant equity — £10,000 each for joint owners, which sits exactly at the threshold; a sole owner’s £20,000 is over it. At or above the line, the proposal runs 72 months; below it, 60. Because the assessment happens once, at the start, later house-price rises do not pull equity into the arrangement — and a home with very substantial equity may make a protocol IVA unsuitable altogether, which is a bespoke-advice conversation, not a form.

What changed, and what came before

For arrangements that started before 1 July 2025, the previous Protocol worked very differently: equity over a £5,000 de minimis was expected to be addressed near the end of the term — typically a valuation and an attempt to remortgage in the final year, with twelve additional monthly payments where no lender would offer. That mechanism produced valuations at year five, failed remortgage attempts in a market hostile to IVA borrowers, and uncertainty the new Protocol was designed to remove. The 2025 approach trades all of that for certainty on day one: the term is fixed at 60 or 72 months from the outset and the home stays out of the arrangement.

Already in an IVA? Your proposal governs, not the Protocol

An IVA is a contract with your creditors on the terms they approved. Arrangements approved before 1 July 2025 do not automatically acquire the new rules — if your signed proposal contains the older equity clause, that clause stands unless varied. Read the property section of your proposal, check the approval date and any creditor modifications, and ask your supervisor to confirm the position in writing. If you are mid-IVA and being told something different from your paperwork, that is a question for the supervisor first and free advice second.

Selling or moving during the arrangement

Excluded does not mean invisible: selling during the term is normally a matter for your supervisor’s consent, and depending on your signed terms a sale you choose to make can bring proceeds into scope. Remortgaging for personal reasons during an IVA also needs approval — and as a practical matter, mortgage credit during an IVA is a specialist, expensive market. Plan property moves with the supervisor, in writing, before committing to anything.

What this means for the homeowner deciding now

The 2025 rules removed the sharpest historical fear — being forced toward the home’s equity late in the arrangement — and replaced it with a known price: a 72-month term where beneficial interest is £10,000 or more. Whether that trade suits you against bankruptcy’s treatment of property or a longer informal plan depends on your figures, and it is exactly what an authorised adviser assesses. Who profits from the recommendation is worth understanding before that conversation.

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