Money and mortgages
Mortgage Agreement in Principle: What First-Time Buyers Need to Know
A plain-English guide to mortgage agreements in principle, also called mortgage in principle or decision in principle, and what to do next.
Quick answer
A mortgage agreement in principle is an estimate of how much a lender might be willing to lend after an initial check. It can help you set a property budget, but it is not a formal mortgage offer and it does not guarantee approval.
Education, not advice. Use this as a clear starting point, check the linked official sources and speak to an appropriately regulated professional before acting. Read the disclaimer
Jump to an answer
The three names mean broadly the same thing
You may see mortgage in principle, agreement in principle, AIP, decision in principle or DIP. These phrases are commonly used for a lender's early indication of how much it might lend.
MoneyHelper says a mortgage in principle will typically be valid for 30 to 90 days. Check the exact expiry date and requirements with the provider.
What it is useful for
- Setting a more realistic search budget.
- Showing an estate agent that you have started preparing your finances.
- Spotting issues that may need attention before a full mortgage application.
What it does not prove
- It is not a formal mortgage offer.
- It does not confirm that a particular property is acceptable to the lender.
- It does not guarantee the lender will offer the same amount after full checks.
- It is not a reason to stretch beyond a monthly payment you can comfortably afford.
Questions to ask before applying
- Will the lender use a soft or hard credit search?
- How long will the result remain valid?
- What information or documents will be needed?
- What changes in my circumstances should I disclose before a full application?
Common questions
Is an agreement in principle a mortgage offer?
No. It is an early estimate. A formal mortgage offer follows a full application, underwriting and the lender's checks on the property.
Do I need an agreement in principle before making an offer?
It is not the same as a legal requirement, but it can help you understand your likely budget and show that you have prepared. An estate agent may ask about your position.
Official sources
Use these sources to check the latest rules and read more detail:
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