Is a mortgage offer legally binding for the bank?

cecco

Hello,

I'm currently looking to remortgage options with the current deal expiring in a year. My idea is to get an offer now and switch to the deal in right before the offer expires. Reading the news of possible further increase by BoE in the coming weeks (not sure that is true or not) I started wondering whether the offer is actually binding for the bank or if they can decide to withdraw it in case the interest goes up by 0.5%. I'm currently waiting for offers by a couple of brokers so I don't have any documentation with me and reading around hasn't really helped.

Thanks!

[Deleted User]

They can withdraw the product at any time, but not once you've been accepted for it, unless you've had a change in circumstances and no longer meet their criteria.

If there's an offer you like the look of, I wouldn't hang around too long.

ACG

Mortgage offers are binding, but there are "get out" clauses. 
If you were made bankrupt for example or lost your job they probably would pull the offer. Likewise if houses prices tumbled or the cost of living rocketed resulting in it affecting your affordability (but thats unlikely to happen ), they might decide that is enough of a reason to pull an offer. 

I did what you are looking at doing though, I applied in March and completed last month. 

biscan25

cecco said:

Hello,

I'm currently looking to remortgage options with the current deal expiring in a year. My idea is to get an offer now and switch to the deal in right before the offer expires. Reading the news of possible further increase by BoE in the coming weeks (not sure that is true or not) I started wondering whether the offer is actually binding for the bank or if they can decide to withdraw it in case the interest goes up by 0.5%. I'm currently waiting for offers by a couple of brokers so I don't have any documentation with me and reading around hasn't really helped.

Thanks!

This isn't usually possible. One can only lock in the rates 3-6months before. This is becoming more generous though https://www.moneysavingexpert.com/news/2022/08/major-mortgage-lenders-amend-product-transfer-rules-to-allow-hom/

That said, BoE rate increases should in theory be baked in to mortgage rates. Only when rate increases exceed market expectations should fixed mortgage rates increase (and vice versa).