Is it possible to apply for a backup mortgage product

MDMD

I am in the process of buying a new build property, offered in Jan 2022, exchanged in July 2022, with an estimated completion of December 2022 and fixed completion (long-stop date) of 6 June 2023. I’m in a rental property now so no chain.

Unfortunately the development is delayed and the development estate agent is being vague as to when they will give me notice to complete (this will be 10 working days). 

My 2.24% mortgage offer with NatWest expires on Saturday 6 May which is around 20 working days away given bank holidays and weekends etc. I have had two three month extensions already so they won’t extend anymore. So this means that within a couple of weeks I will possibly be looking at them giving me a completion date after the expiry of the mortgage.

Is it prudent or possible therefore to apply for a backup mortgage now to avoid this potential issue?

ACG

What happens if you do not complete by the long stop date? Are you able to get them to cover the cost of the higher interest rate?

I would probably hold off a little until you have a more definitive completion date. You should not normally apply for 2 products, but if you have an offer that is not going to carry you through until the completion date it makes sense to be looking at alternatives. 

MDMD

ACG said:

What happens if you do not complete by the long stop date? Are you able to get them to cover the cost of the higher interest rate?

I would probably hold off a little until you have a more definitive completion date. You should not normally apply for 2 products, but if you have an offer that is not going to carry you through until the completion date it makes sense to be looking at alternatives. 

Basically if they fail to give notice by the fixed completion date I can withdraw. Unfortunately the contract is silent on extra interest and I wasn’t anticipating the delay being this long so I’d have to cover that myself I think. 

user1977

ACG said:

What happens if you do not complete by the long stop date? Are you able to get them to cover the cost of the higher interest rate?

The remedy will be to pull out. I've never seen a developer agree (as a matter of contract) to compensate a buyer if things drag on.

ACG

I do not do new builds very often so not something I have ever come across. They never seem to have them built in 6 months but with the extension we are normally ok. 

I just think there is not much of an incentive for a developer to stick to the long stop date. Price agreed over 12 months ago, it would be worth more now anyway (although maybe not in a few months).