An agreement in principle and a mortgage in principle are the same thing; the two terms are used interchangeably by different lenders. If you’ve seen both and wondered whether you need two separate documents, you don’t.
The two names trip up a lot of first-time buyers, so here’s what it actually is, how you get one, and what it does and doesn’t mean.
So Why Are There Two Names?
There’s no official rule about which term to use. Some lenders say “agreement in principle” (AIP), others say “decision in principle” (DIP), and many brokers and estate agents say “mortgage in principle” (MIP). They all describe a lender’s initial indication of how much it might be willing to lend you, based on a quick look at your finances.
It’s not a mortgage offer, and it doesn’t guarantee you’ll be approved. It shows sellers and estate agents that you’re a serious buyer with a realistic budget.
How Do You Get an Agreement in Principle in the UK?
To get one, you’ll usually be asked for details such as:
- Your income and employment status
- Your regular outgoings and any existing debts
- The deposit you have available
- Your address history
The lender checks that against its own criteria and gives you an indication of what it could lend. Some run a soft credit check at this stage and others run a hard one, so it’s worth asking before you apply. If you’re unsure, a broker can tell you which approach each lender takes.
Ready to Get Yours?
Our advisers can arrange your mortgage in principle, with no upfront fee. We’ll look across the whole market for a lender whose criteria suit your situation. Book a free initial conversation with AS Financial.
How Long Does It Last?
It varies by lender, but an AIP is typically valid for between 30 and 90 days. After that you may need to ask for it to be refreshed. If you’re still searching for a home, check when yours expires so it doesn’t lapse part-way through making an offer.
What It Doesn’t Mean
Getting one is a good first step, but it has limits. It isn’t a guarantee, because the lender will still carry out full checks when you make a formal application, and the final decision depends on those. It’s also based on what you tell the lender, so if your circumstances change, or the details you gave turn out to be different, the outcome can change too. And it doesn’t cover the property itself: the lender will still value the home you want to buy before it offers a mortgage.
Why It Helps First-Time Buyers
Some estate agents may ask to see an agreement in principle before considering your position as a buyer. It isn’t a legal requirement, but having one ready can help show you’re prepared to move forward. It also helps you set a realistic budget before you start viewing homes.
Our mortgage in principle guide covers the full process in more detail, and our first-time buyer mortgage advice explains how we support you from planning to completion.
Frequently Asked Questions
Is an agreement in principle the same as a mortgage in principle? Yes. They’re two names for the same thing, and which one you see depends on the lender or broker.
Does an agreement in principle guarantee I’ll get the mortgage? No. It’s an indication, not an offer. The lender will still carry out full checks and a property valuation before deciding.
Do I need one before I start house hunting? It isn’t a legal requirement, but some estate agents may ask to see one before considering your position as a buyer, so it’s usually worth getting one early.
Next Steps
Buying your first home? An agreement in principle is a sensible place to start. Our advisers can arrange yours today, with no upfront fee. Arrange your mortgage in principle with AS Financial.