Can you get a mortgage on an auction property?
Yes, but timing is everything and it’s essential to plan ahead. Auction purchases move quickly, so it’s important to have your mortgage lined up before you start bidding.
With a traditional auction, you’re legally committed the moment your bid is accepted, and you’ll usually need to complete within 28 days. That’s a tight window for a standard residential mortgage, which is why some buyers purchase in cash, or use short-term finance and arrange a mortgage afterwards.
Short-term finance can be expensive, though, so it’s worth weighing up the costs with us first. For most first-time buyers, the Modern Method of Auction which comes with a longer timeline is better suited to buying with a mortgage.
Whichever route you’re considering, it’s best to speak to a broker early. We’ll assess your circumstances, get you a Mortgage in Principle, and help you choose a lender that can work to the deadline.
Traditional auction vs the Modern Method of Auction
Not all property auctions work the same way, and knowing the difference matters when you’re buying with a mortgage.
Traditional auction: When the hammer falls, you exchange contracts there and then. You’ll typically pay a 10% deposit on the day and are legally bound to complete — usually within 28 days. If you don’t complete in time, you can lose your deposit, so your mortgage needs to be ready to move quickly.
Modern Method of Auction: You’ll see this used more and more, often by estate agents. Here, you pay a reservation fee when your bid is accepted, and exchange happens later, typically around 56 days down the line. That extra breathing room to arrange your mortgage makes it a popular choice for first-time buyers. The trade-off is that the reservation fee is usually non-refundable, so it still pays to have things in order before you commit.
How do I know if the property is mortgageable?
This is an important one to watch, especially at auction. Lenders won’t lend on every property. Homes that need significant work — for example, those without a working kitchen or bathroom — or those of non-standard construction (think concrete, steel frame or timber) can be difficult, or even impossible, to mortgage in their current state.
Before you bid, we’re able to check the property details and advise, as far as we can, whether it’s likely to be acceptable to a lender. It’s a quick step that can save you from committing to a property you’re then unable to finance.
Your checklist before you bid
A bit of preparation can protect your deposit and peace of mind. Before auction day, we’d suggest you:
- Get a Mortgage in Principle — so you know what you can borrow and can bid with confidence
- Have a survey done — auction properties are sold as seen, and a survey helps you avoid nasty (and costly) surprises, as well as paying over the odds
- Send the legal pack to your solicitor or conveyancer — they can flag anything in the small print and confirm they’re able to work to the completion deadline
- Speak to your broker — tell us the property, the auction date and your maximum price, so we’re ready to move the moment your bid is accepted
- Check the auction fees — both traditional and modern auctions can carry additional costs
- Set your ceiling — decide the most you’re willing to pay and stick to it. It’s easy to get swept up in the moment, but a clear limit keeps your budget on track
Your home may be repossessed if you do not keep up repayments on your mortgage.
It’s never to early to discuss your mortgage
Tell us about your mortgage requirements and one of our specialist advisors will be in touch within 24 hours.
Why use Mortgage Synergy?
Buying at auction for the first time can feel like a lot of pressure. The pace, the paperwork, the deadlines. That’s where we come in.
As independent, FCA-regulated mortgage advisers, we have access to lenders across the whole UK market, including those who are comfortable with auction purchases and tighter timescales. We’ll get your Mortgage in Principle sorted, help you check the property stacks up, break down the jargon, and keep things moving so you can hit that completion deadline with minimal stress.
Ready to get started?
If you’re thinking of buying your first home at auction, talk to us before you bid — the earlier, the better. Get in touch with us, and one of our specialist advisers will be in touch within 24 hours.
Auction Mortgage FAQs
Yes, and it’s becoming a more and more common route onto the property ladder. The main thing is preparation: get a Mortgage in Principle in place and speak to a broker before you bid, so your finance is ready to move at the pace an auction demands. The Modern Method of Auction, with its longer timeline, is typically more favourable for first-time buyers.
With a traditional auction, you’ll usually need to complete within 28 days of exchange, and exchange happens the moment your bid is accepted. The Modern Method of Auction typically affords you more time, often around 56 days, which can be more forgiving if you’re arranging a mortgage.
At a traditional auction you’ll normally pay a 10% deposit when your bid is accepted and contracts exchange. This is separate from your mortgage deposit, so it’s important to have those funds ready.
We’d strongly recommend it. It gives you a clear idea of what you can borrow and shows you’re a serious buyer. It also means you’re not scrambling to arrange finance once you’re legally committed.
With a traditional auction, missing the completion deadline can mean losing your deposit and facing extra costs, which is why it’s important to get everything lined up in advance. If timing is tight, we’ll realistically talk you through your options.
It depends on the condition of the property and the lender. A home that’s deemed uninhabitable (say, without a working kitchen or bathroom) or one of non-standard construction can be tricky to mortgage as it stands. Send us the details before you bid and we’ll check whether it’s likely to be lendable.