Quick take: Your mortgage offer is a contract between you and the lender. It sets out not just your interest rate and monthly payment, but also what the lender can do if circumstances change. Most first-time buyers focus on the headline rate and skip the conditions. The conditions are where the surprises hide.

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What a Mortgage Offer Contains

A typical mortgage offer runs to 15-25 pages. It includes:

• The loan amount, term, and interest rate

• Monthly payment amounts (initial and after any fixed/tracker period ends)

• Special conditions (requirements you must satisfy before completion)

• General conditions (rules for the life of the mortgage)

• The mortgage deed (the legal charge over the property)

1. Special Conditions

These are requirements specific to your application that must be met before the lender releases funds. Common ones include:

• Satisfactory evidence of deposit source: Lenders now routinely ask for bank statements showing where your deposit came from. Gifted deposits require a signed declaration from the donor

• Specialist reports: If the valuer flagged damp, potential asbestos, or an unusual construction type, the lender may require a specialist report before proceeding

• Retention: The lender may hold back part of the loan until specific works are completed (common with properties needing repairs)

A first-time buyer in Leeds received a mortgage offer that included a condition requiring a damp and timber report before completion. The surveyor's report cost 400 pounds and added three weeks to the timeline. She only discovered this condition when her solicitor flagged it, two weeks after she received the offer.

2. The Reversion Rate

If your rate is fixed for two or five years, check what happens afterwards. The offer will specify the "Standard Variable Rate" (SVR) or "reversion rate" that applies when your deal ends.

SVRs are typically 3 to 5 percentage points higher than the initial rate. On a 200,000 pound mortgage, moving from a 4.5% fixed rate to an SVR of 7.5% could increase your monthly payment by over 300 pounds. Most borrowers remortgage before the fixed period ends, but it is important to know what you are defaulting to.

3. Early Repayment Charges

Most fixed-rate and tracker mortgages include early repayment charges (ERCs) during the initial product period. These are typically 1% to 5% of the outstanding balance, reducing each year.

ERCs apply if you:

• Pay off the mortgage early (for example, if you sell the property)

• Overpay beyond the annual overpayment allowance (usually 10% of the balance per year)

• Switch to a different lender before the fixed period ends

On a 200,000 pound mortgage with a 3% ERC, that is 6,000 pounds. Worth knowing before you sign.

4. Offer Expiry

Mortgage offers are valid for a fixed period, typically three to six months. If your purchase takes longer (chain delays, slow searches), the offer may expire. Requesting an extension is usually possible but not guaranteed, and the lender may reassess your application against current criteria and rates.

5. Portability

Some mortgage products are "portable", meaning you can transfer them to a new property if you move. This can be valuable if you have a good rate that is no longer available. However, porting is not automatic and you will need to reapply and meet the lender's criteria at that time.

FAQ

Should I read the whole mortgage offer?

Yes, or at minimum the special conditions and the summary of key terms. Your solicitor will also review it, but understanding what you are signing puts you in a stronger position.

Can I use AI to review my mortgage offer?

Yes. You can upload the offer as a PDF or scanned document to a tool like Unwildered, which can highlight special conditions, flag unusual terms, and summarise the key financial details in plain English. It is a useful way to prepare before speaking to your solicitor or broker.

Disclaimer: This article is general information, not financial, tax, or legal advice.