I'm thinking about entering an IVA but just have a question. My mortgage is on a fixed rate at the moment & interest only. If my deal ends whilst in the IVA & my mortgage payments go down (as the interest rate is lower than my current deal) would I be able to keep my mortgage payments the same (ie change from interest only to repayment) or would I have to keep my mortgage on interest only & pay the extra to the IVA.
Once you are in an IVA and your current mortgage deal expires you will move to the bank's variable rate. If this results in a lower mortgage payment, your creditors will expect you to increase your contributions accordingly. If you stay in interest only this will give a better dividend to your creditors.
Regards
Andrew Bowers
Licensed Insolvency Practitoner
Do bear in mind that if your disposable income increases, and your IVA has been presented in line with the IVA protocol, you will only need to increase your payments by 50% of the difference so this would leave you with a surplus which you could use to fund repayments against the capital balance of your mortgage.
A repayment mortgage during an IVA can be a disadvantage, as this could lead to an increase in equity which you may find yourself having to fund during a sixth year.
