Buying guide
Mortgage Agreement in Principle: What It Means and What Comes Next
A mortgage agreement in principle (AIP), also called a decision in principle, is a lender's provisional indication of what it might lend based on initial information. It is not a guaranteed mortgage offer: final approval depends on full affordability and credit checks, supporting documents and the property. Some lenders use a soft credit search for an AIP; others use a hard search.
Applies to: General UK mortgage guidance; lender eligibility, credit-check and validity policies differ.
What an agreement in principle actually means
A mortgage agreement in principle (AIP), also called a decision or mortgage in principle, is an initial indication of how much a lender may be prepared to lend using preliminary information. It is not a guaranteed mortgage approval or a commitment to finance a particular property.
Estate agents may request an AIP as evidence you have investigated your budget, but it does not remove the need for full affordability checks, income verification, credit assessment and property valuation.
Practical checklist
- Treat the amount as a ceiling for planning, not advice.
- Maintain budget room for fees and repairs.
- Avoid assuming an AIP guarantees approval.
What information lenders normally request
Providers may ask for your income, expenditure, regular commitments, deposit and address history. Their criteria can differ, so two lenders may produce different initial estimates from similar information. If you have variable income, self-employment, large debts or complicated circumstances, the later mortgage application may need additional evidence.
Check how the lender interprets bonuses, overtime and other income. A lender's nominal upper limit may exceed the monthly payment you find comfortable after household costs and contingency.
Practical checklist
- Prepare income and monthly expenditure information.
- Consider existing debt and childcare expenses.
- Compare monthly affordability at a higher assumed rate.
Does the credit check affect your record?
Some lenders use a soft credit search at the agreement-in-principle stage; others may use a hard search. Soft checks are not visible to other lenders in the same way and do not affect scoring as hard checks can. Ask the lender which type it uses before applying repeatedly.
An AIP and the credit-search policy are specific to the provider. Do not assume all comparison services use the same checks or that an AIP will remain valid for a fixed universal period.
Practical checklist
- Ask whether the check is soft or hard.
- Confirm the agreement's actual expiry date.
- Avoid unnecessary repeated applications.
From AIP to a formal offer
After making an offer on a suitable home, you normally complete a full mortgage application and the lender evaluates your circumstances and the property. A formal mortgage offer has different legal significance from an AIP. Financial or property details changing along the way may alter the outcome.
Keep your conveyancer and lender informed of material changes. Avoid taking on new credit or making assumptions about completion until all applicable checks and legal arrangements are sufficiently progressed.
Practical checklist
- Keep paperwork available for underwriting.
- Read the formal offer conditions.
- Confirm validity dates and contingency plans.
What to read next
Continue with the most relevant next step, or explore the buying journey.
References and further reading
These are the original legal, regulatory and professional sources used to inform this article. MMG explains the key steps above so you do not have to follow external links to find the answer. Circumstances and UK jurisdiction can affect the rules, especially for legal or financial decisions.
- MoneyHelper: Mortgage in principle(opens in a new tab)
- MoneyHelper: Mortgage in principle versus formal offer(opens in a new tab)
My Move Guide publishes general information, not personalised legal, tax, mortgage or financial advice. Estimates and requirements differ by location and circumstances.