Your mortgage loan offer: the conditions, how long it lasts, and what comes before drawdown

The loan offer is the letter that says the lender has agreed to lend you a set amount on a named home. It replaces approval in principle, which was only an estimate. It comes with conditions, it has an expiry date, and the money does not move until every condition is met. This guide explains what is in it, what you have to do, and what happens between the offer and the day the money is paid out.

From approval in principle to the offer

Approval in principle (AIP) is a letter saying how much the lender may lend you. It helps you bid, but it is not a promise. Once you go sale agreed, you go back to the lender with the address and the price. The lender:

1. Sends a valuer to the home. The valuation costs about €185 and says what the home is worth for the loan.
2. Checks your documents again: recent payslips, bank statements, proof of the deposit.
3. Checks the Central Bank limits: for a first-time buyer, up to 4 times gross income and 90% of the price.
4. Issues the loan offer, usually two to four weeks after sale agreed.

The buying timeline tool shows where this sits among the other steps.

What the offer says

The letter sets out:

Put the amount, the rate and the term into the repayment calculator and check the monthly figure matches the letter.

A worked example

Laura and Sam are buying a house at €400,000 with a €40,000 deposit. Their loan offer is for €360,000 over 30 years at a 3.5% fixed rate for five years. The monthly repayment comes to about €1,617. The offer is dated 10 April and runs to 10 October. Their closing date is 5 June, well inside it. The conditions require a mortgage protection policy for €360,000 over 30 years in both names, and buildings insurance for the rebuild cost of the house, with the lender's interest noted on it.

The usual conditions

The conditions are the part people skip. Do not. The lender does not release the money until each one is met. The usual ones:

• Mortgage protection. A life insurance policy that pays off the loan if a borrower dies. The Consumer Credit Act 1995, section 126, requires the lender to make sure the loan is covered, with narrow exceptions (for example a borrower over 50, or where cover cannot be obtained). You can buy it from any insurer, not just the lender. A first year typically costs €200 to €700, depending on age, health and the loan. See the mortgage protection page.
• Buildings insurance. Cover for the cost of rebuilding the home, with the lender's name noted on the policy. From the day you own it, and often from the day you sign contracts. A first year typically costs €300 to €600. See the home insurance page.
• A direct debit mandate for the repayments.
• Proof of the deposit, from your own savings, a gift, or Help to Buy on a new build.
• A valuation report showing the home is worth at least the price.
• Your solicitor's undertaking. A written promise from your solicitor to the lender to register the mortgage on the home and send the lender the deeds.
• Any special condition: a structural report on an older home, a certificate for an extension, a retention of part of the loan until work is done.

Accepting the offer

The letter asks you to sign an acceptance and return it, usually within a few weeks. Your solicitor (check the Law Society's register; see the conveyancing solicitor page) goes through the terms with you first and signs too. Accepting means you agree to the terms. It does not draw the money. You can still walk away before contracts; the sale agreed guide explains that stage.

Picking the rate

The offer usually gives you a choice of rates: a fixed rate for one to ten years, or a variable rate. The rate that applies is the one on the day of drawdown, not the day of the offer, unless the letter says otherwise. The fixed or variable guide sets out the questions that decide it. No one can say what rates will do over your term, so pick on what you can carry now and what you can live with if it changes.

How long it lasts

A loan offer is usually valid for six months. If you have not drawn down by then, the lender looks at your position again. That can mean new payslips, new statements and a fresh credit check. If nothing has changed, a new offer follows. If something has, the amount can change.

On a new build, six months is often not enough. Builders run late. Tell the lender as soon as you see the completion date slipping, so the extension is sorted before the offer expires. The new build guide covers the long-stop date and the delays.

What can go wrong between offer and drawdown

The lender checks again just before it sends the money. The offer can be withdrawn if:

• You change job, or your income drops.
• You take on new debt: a car loan, a credit card, buy now pay later.
• You miss a payment on anything.
• Your deposit is not where you said it was.
• The home's value falls below the price before drawdown.
• A condition is not met in time.

Keep your money where the lender saw it. Do not move it around. Ask before you change anything.

What comes before drawdown

Drawdown is the day the lender pays the money out to your solicitor. Before it:

1. You sign contracts and pay the 10% deposit. The signing contracts guide covers this.
2. You put mortgage protection and buildings insurance in place and send the lender the policy documents.
3. Your solicitor sends the lender the undertaking and the request for funds, usually a week or so before closing.
4. The lender sends the money to your solicitor's client account on the closing date.
5. Your solicitor pays the seller's solicitor and you collect the keys.

The drawdown guide walks through how the money moves.

Where this leaves you

Put the amount, rate and term from your offer into the repayment calculator and check it against the letter, then start on the conditions the same day: mortgage protection and home insurance take longest. The first-time buyer journey shows the order of the last steps. This site passes no details to insurers. Compare quotes directly, or get quotes for the solicitor who handles the undertaking.