It's crucial to know exactly how long your mortgage offer is valid if you want to have a smooth home-buying experience.
A Property Centre Guide: How Long is a Mortgage Offer Valid For?
Once you accept the offer, your conveyancer can start the final steps of purchasing the home.
If you think there might be delays, it's beneficial to have an understanding of the length of the mortgage offer ahead of time.
What is a mortgage offer?
A mortgage offer is an official document from the lender that confirms your property has been valued and approved.
This happens after you send over information about finances and the property you want to purchase, and when the lender checks that everything meets their criteria for a mortgage.
The mortgage offer you receive will contain your personal information, property details, and the conditions of the loan. These include:
- Interest rate
- Length of the mortgage's initial term (for example two, five, or 10 years)
- Repayment amount and type
- Whether you’re able to overpay
- Any mortgage fees that require payment
- Early repayment charges
The amount of time until an offer is issued generally falls between 18-40 days, depending on the complexity of the application.
How long is a mortgage offer valid?
The expiry date for all mortgage offers is different and set by the lender, but they usually last for around three months and in some cases, it can be up to six months.
The validity of the offer begins from the day you applied or when the offer was generated. Alternatively, some offers outline a specific date that you must have completed the sale of the property.
Anytime you're considering taking out or changing a mortgage, it is crucial that you first check the terms and conditions so you know exactly what you're signing up for.
How long do I have to consider my mortgage offer?
After your mortgage offer has been released, you have a week-long reflection period to think about the agreement's terms and conditions.
Your conveyancer cannot finalise the mortgage without your approval during this time.
If you choose to back out within this timeframe, be aware that there may be a charge.
How soon will my mortgage offer expire if I'm buying a new build?
Mortgage offer criteria tend to be slightly more complex for new builds, with six months serving as the standard mortgage offer period for new builds bought off plan.
However, as the mortgage offer for newly built properties can slightly differ, you may be able to apply for an extension. Advisers will be able to shop around for the right deal to suit your needs.
What happens if the mortgage offer expires?
If you find that your sale is taking longer than expected and there are not enough days left to meet your mortgage offer deadline, contact your lender right away.
Depending on the situation and which lender you're using, you might be able to apply for an extension.
Some banks and building societies may also give you more time if factors beyond your control have caused the delays.
Even so, keep in mind that this could come with extra fees and the process can prove tricky.
However, if your lender is unwilling to offer an extension, you will have to reapply for your mortgage.
The reason is that in the eyes of the lender, your financial circumstances may have changed during this period.
Consequently, new credit checks and affordability assessments must be carried out again - also resulting in a variety of extra costs such as solicitor’s fees or an additional valuation.
If the property has increased in value over time, you may need to come up with more money since your deposit sum increased too.
