A mortgage agreement in principle (AIP), also called a decision in principle (DIP) or mortgage in principle, is a conditional statement from a lender showing how much they may be willing to lend you. It is based on an initial affordability assessment and a soft credit check. An AIP gives you and the seller confidence that you can likely secure a mortgage, but it is not a guarantee or a final mortgage offer.

What an Agreement in Principle Is

An agreement in principle is an early-stage approval that tells you the maximum amount a lender might lend you, subject to a full mortgage application and property valuation. The lender reviews basic details about your income, monthly outgoings, employment status, deposit size, and credit history to determine whether you meet their initial lending criteria.

According to MoneyHelper, obtaining an AIP early in your home search helps you understand your budget and demonstrates to sellers that you are a serious buyer (MoneyHelper, 2026). Most AIPs use a soft credit search, which does not leave a visible mark on your credit file for other lenders to see. The certificate is typically valid for 60 to 90 days, giving you a window to find a property and make an offer.

Some lenders call it a decision in principle instead of an agreement in principle, but the function is the same. The AIP is not a legally binding contract, and the lender can still decline your full application if your circumstances change or the property does not meet their criteria.

Why You Need One

Estate agents and sellers often ask for proof that you can afford the property before accepting your offer. An AIP demonstrates that a lender has reviewed your finances and is prepared, in principle, to lend you the money. This makes your offer more credible than one from a buyer with no pre-approval, especially in competitive markets where multiple buyers are bidding on the same property.

First-time buyers, in particular, benefit from the clarity an AIP provides about how much they can borrow. Without an AIP, you risk falling in love with a property you cannot afford, or making an offer only to discover later that no lender will approve you for that amount. The AIP sets realistic expectations and helps you focus your search on properties within your budget.

In fast-moving markets, having an AIP can be the difference between securing a property and losing it to another buyer who is ready to proceed. Sellers and their agents prioritise buyers who have already taken this step, as it reduces the risk of the sale falling through due to mortgage problems.

How to Get One

You can apply for an AIP directly through a lender’s website, over the phone, or through a mortgage broker. The application asks for details including your annual income, employment type, monthly financial commitments (credit cards, loans, childcare), deposit amount, and the purchase price you are aiming for. The lender runs a soft credit check and, if your finances meet their lending criteria, issues the AIP within minutes or a few days.

According to MoneySavingExpert, you should gather payslips, bank statements, and proof of deposit before applying, as some lenders request these documents even for an AIP (MoneySavingExpert, 2026). Because the check is soft, you can approach multiple lenders to compare offers without damaging your credit score. A mortgage broker can help you find the lender most likely to approve your full application based on your circumstances, such as your employment type, credit history, or deposit size.

Be honest and accurate when completing the AIP application. Overstating your income or understating your outgoings may result in an AIP that does not convert into a final mortgage offer, wasting time and delaying your purchase.

What Happens After You Get an AIP

An AIP is not a binding contract and does not guarantee final approval. Once you have found a property and had your offer accepted, you submit a full mortgage application. The lender then conducts a hard credit search, verifies your income and employment in detail, commissions a property valuation, and reviews all supporting documents. The final mortgage offer depends on this full underwriting process and the property meeting the lender’s criteria.

The property valuation is a critical step. If the surveyor values the property below the purchase price, the lender may reduce the loan amount or withdraw the offer entirely. You would then need to renegotiate the price, find additional deposit funds, or walk away from the purchase.

Which? notes that changes in your financial circumstances between the AIP and the full application, such as taking on new debt, changing jobs, or missing credit card payments, can lead to the lender declining the full application even if the AIP was approved (Which?, 2026). Keep your finances stable during this period and avoid taking on new credit commitments.

How Long an AIP Lasts

Most AIPs are valid for 60 to 90 days, though the exact period varies by lender. If you do not find a property within that window, you can usually renew the AIP by reapplying, often without needing another credit check if your circumstances have not changed. However, if interest rates or lending criteria have changed in the interim, the renewed AIP may offer a different borrowing amount or different product options.

If your AIP expires and you apply to a different lender, they will conduct their own soft search and assessment. This gives you an opportunity to shop around, but it also means you may receive a lower offer if the new lender has stricter affordability rules.

Common Pitfalls

Do not assume an AIP means you are guaranteed a mortgage. Lenders can and do decline full applications after issuing an AIP, particularly if the property valuation comes in low, your credit file reveals issues the soft search did not capture, or your financial situation changes. Treat the AIP as an indication of borrowing power, not a promise.

Avoid applying for multiple AIPs with different lenders in quick succession if you are using a hard search lender by mistake. Some lenders conduct a hard credit check even at the AIP stage, and multiple hard searches in a short period can lower your credit score and make other lenders wary. Confirm with the lender or broker that the AIP uses a soft search before applying.

Finally, do not overstretch your budget simply because a lender is willing to lend you a certain amount. Consider your actual monthly outgoings, future financial goals, and the risk of interest rate rises when the deal period ends. Borrowing the maximum may leave you financially vulnerable if your circumstances change.

Disclaimer

This article provides general educational information about mortgage agreements in principle in the UK. It is not regulated mortgage advice and is not personalised financial, lending, or legal advice. Refisage is not authorised by the Financial Conduct Authority (FCA). Consider speaking to an FCA-authorised mortgage adviser to understand which mortgage products suit your circumstances. Eligibility, lending limits, and criteria vary by lender and your personal situation. Rates and products available change frequently; verify current terms with an FCA-authorised mortgage adviser before making any decision. Your home may be repossessed if you do not keep up repayments on your mortgage.