66 . 7 %

By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 24th November 2020*

Mortgage offers can be withdrawn by lenders at pretty much any time, even if you’ve exchanged contracts or reached the day of completion. This can be hugely frustrating for would-be homeowners, but the good news is that help is available, and you’ve come to the right place to find it.

This guide covers the most common reasons mortgage offers have been withdrawn and provides vital information for anyone who has experienced this, whether it happened to you after exchange or even further along than that.

We’ve also explained how a mortgage broker can help you in these scenarios, plus in our FAQ section, we have answered some of the questions we hear most often from customers who’ve had a mortgage offer withdrawn.

We’ll find the perfect mortgage broker for you - for free

Save time and money with an expert mortgage broker who specialises in cases like yours

  • We've helped over 120,000 get the right advice
  • Our form only takes a minute, then let us do the hard work
  • Save up to £400 per year with the right advice (source: FCA)
  • All the brokers we work with have whole of market access

Can a mortgage offer be withdrawn by a lender?

Yes, mortgage lenders usually reserve the right to withdraw mortgage offers and can even pull out of the agreement after the exchange of contracts. When you receive a written mortgage offer, there’s usually a section which outlines the circumstances that can result in a withdrawal. Be sure to read this in full to help prevent the agreement from collapsing unnecessarily.

Why would a mortgage offer be withdrawn?

The most common reasons why a lender would withdraw a mortgage offer include…

A change of circumstances

If the facts you provided the mortgage lender with during the application process were suddenly rendered out of date by a change of circumstances, such as a redundancy or a dramatic increase in your outgoings, this can result in a mortgage offer being withdrawn; in extreme cases, at least.

At the very least, your lender could revisit the terms of the deal. For example, they may adjust the amount they’re willing to lend if your affordability for a mortgage has been impacted. If your situation has changed since you filed your mortgage application, update the lender immediately.

If you’ve had a mortgage application withdrawn due to a change of circumstances, see our guide through the link for further information.


Suspicious activity

A bank or building society can withdraw a mortgage offer if they detect suspicious activity around the application. If they have any reason to believe the applicant is attempting to commit property fraud or has provided false information on their paperwork, they will likely pull the plug to safeguard themself from becoming a party to fraudulent activity.


Property issues

A mortgage company can also withdraw an offer because issues with the property have arisen. This may include problems which affect its value or compromise the lender’s security over the asset. For example, a high risk of flooding may come to light during the conveyancing checks.

When a property issue like this is flagged up, it doesn’t automatically mean your mortgage offer will be withdrawn. It’s often the case that the terms of the deal are reconsidered, but keep in mind that the lender has the right to slam the brakes on the agreement if they choose to.


Failing further credit checks

Most mortgage lenders are happy to offer an agreement in principle without carrying out a hard credit check. A soft credit search will only show the mortgage provider your basic credit profile, but they will need to take a closer look at your finances before progressing to a formal offer.

Mortgage underwriters will go through your credit file with a fine-tooth comb, and if any instances of bad credit come to light, the lender might reconsider their offer. For example, a hard credit check might highlight payday loan usage or an unresolved debt management plan.

These issues aren’t usually deal-breakers, as many lenders consider offering bespoke mortgages for poor credit-rated customers, but in the worst-case scenario, they could mean you’re refused for a mortgage.


The mortgage offer expired

Most mortgage offers are only valid for a certain period of time, and if you fail to complete during that window, the lender has the right to withdraw from the agreement.

Most offers are valid for up to six months and, to a lesser extent, for 12 months, depending on the circumstances. If you’re having trouble meeting that time frame, it may be possible to get an extension, although this is becoming more difficult to achieve. Speak to your solicitor about requesting this if you’re approaching the date when your offer will lapse.

When can a mortgage offer be withdrawn?

A mortgage lender has the right to withdraw an offer at any time, even after the exchange of contracts, all the way up to completion. Any circumstances that could cause this to happen will be fully outlined in your mortgage offer, but you can always speak to a mortgage broker for advice if things are unclear.

If you’ve had a mortgage offer withdrawn, the steps you should take will differ depending on where you were up to in the home-buying process. Read on for more information.

Can a mortgage offer be withdrawn after exchange of contracts?

Yes. Some mortgage offers are withdrawn between exchange and completion. Although this is rare, it could happen for the reasons we outlined in the previous section, namely…

  • The applicant’s circumstances changed
  • Defect with the legal title
  • Suspicious activity comes to light late on
  • The offer expired
  • The applicant filled out their application incorrectly
  • The lender has changed its criteria

Having a mortgage offer withdrawn at this late stage can be expensive as the borrower could be left to bear the costs of failing to complete. None of these costs can be reclaimed if the mortgage offer was withdrawn because you breached the terms of the agreement.

There are ways you can minimise your chances of having a mortgage offer withdrawn before completion, such as…

  • Keep your lender fully informed about any changes of circumstances
  • Speak to your solicitor about an extension if you’re struggling to complete on time
  • Speak to a mortgage broker and ask for help with your paperwork. This way, you can make sure it is completed correctly and any problems can be addressed beforehand

If your mortgage lender does decide to withdraw your offer, be sure to contact them and ask for full details about why they made that decision. If you’re unable to renegotiate the terms of the deal, get in touch and we’ll match you with a mortgage broker who can outline your options.

On the day of completion

Most mortgage lenders will have identified any deal-breaking issues long before this point, so mortgage offer withdrawals on the day of completion are rare. That said, there are circumstances in which they can happen. They are no different to the scenarios outlined in the previous sub-section and you’ll find tips for avoiding them in there, too.

If you’ve had a mortgage offer withdrawn on the day of completion, speak to your solicitor for legal advice as you’ll almost certainly incur costs at this late stage. You should also speak to a mortgage broker to discuss what your options will be going forward.

Can a mortgage be withdrawn after completion?

Technically, no, but if you fail to keep up with your mortgage payments or breach the terms of your agreement, your mortgage lender could take legal action and apply to the courts to repossess your property.

Here are a few handy tips to help you make sure it doesn’t come to that…

  • Keep your lender fully up to date about any change of circumstances
  • Inform your lender immediately if you’re struggling to keep up with your payments. Workaround solutions such as a mortgage payment holiday or a term extension could be available
  • Contact Citizens Advice if you’re struggling financially
  • Speak to a mortgage broker for bespoke advice about your mortgage options

What should I do if I’ve had a mortgage offer withdrawn?

First of all, don’t make any hasty decisions. Running straight to another lender in the hope of fast-tracking your application over the line elsewhere could mean that the same issue will stop you in your tracks again. Having more than one rejection in such a short space of time could be damaging to your credit report and therefore future mortgage prospects.

If you’ve spoken to your lender and the problem that caused them to withdraw their offer cannot be resolved, your next step should be to make an enquiry with us so we can match you with a whole-of-market broker.

We offer a free broker-matching service which will ensure you’re paired up with the mortgage advisor whose expertise is just right for your needs and circumstances. They will search the entire market on your behalf and track down all of the best deals you qualify for and the lenders which are the least likely to withdraw an offer to a borrower with your profile.

A no-obligation chat with a mortgage broker won’t cost you a penny, but could save you time, money and potential disappointment in the long run.

Frequently asked questions

Here you’ll find the answers to some of the questions we hear most often about withdrawn mortgage offers. If you have a query that isn’t covered here, get in touch and we’ll match you with a whole-of-market broker who will be able to help.

How often are mortgage offers withdrawn?

Mortgage lenders normally only withdraw mortgage offers as a last resort and will usually explore workaround solutions, such as altering the terms of the deal or changing the amount they’re willing to let you borrow. After the exchange of contracts stage, withdrawals are relatively rare as any deal-breaking issues should have already been picked up by this point.

Am I more likely to have a mortgage offer withdrawn in 2020 or 2021?

Due to the coronavirus pandemic, the answer is most likely yes, unfortunately. The COVID-19 outbreak has had a major impact on the property sector, with interest rates dropping and many mortgage lenders suspending products from the market, and this has increased the chances of offers being withdrawn, agreements being postponed and deals being altered.

The good news is that things have improved dramatically since the UK exited its first national lockdown in the spring. Some lenders have relaxed their criteria and the number of available products is improving by the day.

If you’ve had a mortgage offer withdrawn due to COVID-19, get in touch to speak with a specialist broker, or see our guide to coronavirus and mortgages for more information.

Could my mortgage offer be withdrawn if I’m on furlough?

This could potentially be done at the mortgage lender’s discretion. If your employer has placed you on furlough during the coronavirus pandemic, your mortgage provider might consider putting things on hold due to affordability issues or concerns about your job security.

If this has happened to you, one possible option might be to look for another lender who is willing to take a more flexible approach to furloughed customers. During the COVID-19 crisis, many lenders have changed their criteria, so seeking specialist advice before you head into the market is more important than ever. Going it alone is not recommended.

See our guide to Getting a Mortgage While on Furlough for more information.

Can I withdraw my own mortgage application?

Yes. You can cancel your mortgage application at any point up to completion but you might be liable for some non-refundable costs if you’re at an advanced stage in the process. Speak to your lender about the implications of this, and don’t forget that the brokers we work with are on hand if you need bespoke advice about your mortgage application.

Could my mortgage offer be withdrawn if I’ve been made redundant?

Yes. A mortgage offer could be withdrawn because of redundancy at any point up to completion. This would be classed as a change in your circumstances. If you’ve lost your job, be sure to contact the lender immediately to bring them up to speed about this.

Whether the lender will withdraw the offer entirely or simply change the terms of the deal will depend on your circumstances. For instance, if it was a joint mortgage application and the debt is affordable on your partner’s income alone, it might still be possible to get a mortgage.

What can I do if I’ve had a mortgage offer withdrawn by Nationwide, Santander, Halifax, Natwest or any other mainstream mortgage lender?

First of all, ask the lender why they have made that decision as this is the information you will need in order to make the right decision regarding your next move.

The important thing to keep in mind is that having a mortgage offer withdrawn by a mainstream lender like Nationwide, Santander, Halifax or Natwest doesn’t mean it’s the end of the road for your homeownership plans. Although it might be frustrating, the reason for the withdrawal might simply be that the product you’re applying for is no longer available through that lender.

To give another example, a high street bank or building society might have decided to cancel your mortgage offer after the agreement in principle stage, having discovered that you have bad credit during the final credit checks. Starting afresh with a lender who specialises in bad credit mortgages might be a workaround solution for you.

If you’re unsure what your next step should be post-withdrawal, speak to a whole-of-market broker. They can give you the right advice and lay out all of your available options.

Speak to an expert

If you’ve had a mortgage application withdrawn and are unsure what to do next, make an enquiry with us and we’ll match you with an expert mortgage broker for bespoke advice.

This is exactly the kind of scenario a mortgage broker can help you out with. They’re best positioned to offer you bespoke advice about your next move, and can search the entire market on your behalf for an alternative lender where a successful outcome will be more likely.

Not all mortgage brokers have the same expertise. Some will be better equipped to handle your case than others, depending on your needs and circumstances. But with our free broker-matching service on your side, you can rest assured that you’ll be introduced to the right expert for you, and this introduction could save you time and money in the long run.

Remember, reapplying with another lender straight away could potentially damage your mortgage prospects. Having another rejection in such a short space of time might harm your creditworthiness, but with the help of the brokers we work with, the chances of you ending up with the wrong mortgage provider are far slimmer.

Call 0808 189 2301 or make an enquiry online and we’ll match you with a broker for a free, no-obligation chat today.

Updated: 24th November 2020
OnlineMortgageAdvisor 2020 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.