A mortgage with a DMP, or after an IVA.

First, which one are you actually in?

It matters more than people expect, and a surprising number are unsure.

A debt management plan — a DMP, which is what everyone calls it — is an informal arrangement: you pay an agreed reduced amount to your creditors, usually through a plan provider, and you can leave it at any time, though the underlying debts remain and creditors may resume pursuing repayment. It is not legally binding, and it does not appear on your credit file as a single entry — what shows is the effect on the individual accounts, often as arrears or defaults.

An IVA is formal and binding. It is recorded on the Individual Insolvency Register while it runs, and it sits on your credit file for six years from the date it started — which means it can still be showing for a year or more after you have finished paying.

There is a third arrangement that gets muddled with both, and it is worth naming because the mortgage consequences differ. A debt relief order is a formal alternative to bankruptcy for people with a low income and very little in the way of assets. It runs for a year rather than five or six, the debts covered are written off at the end, and — like the others — it is recorded for six years from when it was made. If that is what you have, say so rather than calling it an IVA, because the two are assessed differently and the timeline is not the same.

The thresholds for a debt relief order have been raised more than once, so anything you read about the limits may be out of date. StepChange and Citizens Advice will tell you where they stand today, free.

If your plan is still running

This is the narrower of the two situations, and I will not pretend otherwise. Many mainstream lenders may not consider it, depending on their criteria. A smaller group of specialist lenders will look at it, typically where the plan has been running without a missed payment for a decent period, where there is a meaningful deposit, and where the sums work with the plan payment counted as a commitment.

The other question people ask is whether settling the plan first changes the picture. I can tell you how each position reads to a lender; whether to settle is a decision to take with free debt advice, because it affects far more than the mortgage.

What lenders actually look at on a DMP

Almost nobody assesses a DMP as a single fact. What gets examined is the entries around it — the defaults and arrears recorded on the individual accounts before the plan started, and how long ago those were registered. The plan itself is frequently the least interesting part of the file.

That has a consequence people find counter-intuitive: both how long you have been paying the DMP and how long ago the markers were placed may matter, though the weight given to each is lender-specific. Two years of perfect DMP payments against defaults registered last spring is generally a harder case than a DMP started five years ago on markers that have nearly aged off.

The monthly DMP payment is also relevant to affordability, though how lenders treat it and how it affects their calculations can vary. A plan that feels manageable can quietly reduce what you can borrow by more than the arrears themselves do.

Three things are usually worth establishing before anyone applies: the exact dates the markers were registered, whether the plan payment could be evidenced as consistently met, and whether settling in full is genuinely within reach or would simply move the deposit problem somewhere else.

If it has finished

Considerably more open, and it improves with time. What lenders look at is when it completed, how the accounts behaved during it, whether anything has gone wrong since, and how long remains before the entries drop off. Six years from the start of an IVA is the horizon most people are counting towards — and several lenders will consider a case well before that date, particularly with a reasonable deposit.

The paperwork worth having before you apply

This is the practical half nobody writes about, and it is usually the difference between an application that moves and one that stalls for three weeks while documents are chased.

If you had an IVA, get the completion certificate. Your supervisor issues it when the arrangement finishes, and lenders routinely ask for it — it is the only document that proves the thing is actually over rather than merely stopped. People often cannot find theirs years later, and requesting a replacement takes time you will not have mid-application. The entry on the Individual Insolvency Register is removed three months after completion, so an absence from the register is not itself proof of anything either way.

If you are on a DMP, get a statement showing the payment history. A plan paid in full and on time for two years is an argument in your favour, but only if it can be evidenced. Your provider can produce it.

One detail worth checking on that statement. A DMP distributes what you pay across your creditors pro rata, and most plans have periods where the payment dropped — sometimes to a token amount during a spell of hardship. That is not a disaster, and it is not a missed payment, but an underwriter reading the statement cold may not distinguish the two. It is far better to explain a token-payment period up front than to have it queried later, because at that point you are explaining it to someone who has already formed a view.

A word about free debt advice

If you are currently paying a company to manage a plan, it is worth knowing the same service is available free from StepChange and PayPlan, and Citizens Advice can point you to it. That has nothing to do with me or your mortgage, and I have no interest in it either way — but people are often paying for something they need not, and it is worth saying.