A mortgage in principle is a written statement from a lender showing roughly how much they might be willing to lend you, based on a few details about your income, spending and credit history. It isn’t a full mortgage offer, but for most first-time buyers in the UK, it’s one of the first things to sort once you’re serious about buying.
Getting one early gives you a realistic budget to house-hunt with and a clearer sense of your position when you come to make an offer. For buyers in London, our advisers can often arrange a mortgage in principle the same day.
What is a mortgage in principle?
A mortgage in principle (MIP) is an indication from a lender of how much they may be prepared to lend you, based on an initial look at your income and credit record. You’ll normally receive written confirmation of the lender’s indication, which you can refer to when discussing your position with an estate agent.
It typically sets out which lender it’s from, an indication of the amount, and how long it’s valid for. Because it rests on the figures you’ve supplied plus a quick credit check, a lender can produce one before you’ve even found a property to buy.
Is a mortgage in principle the same as an agreement in principle or decision in principle?
Yes, for the most part: “Mortgage in principle”, “agreement in principle” (AIP) and “decision in principle” (DIP) are generally used interchangeably. Different lenders and estate agents simply use different names for it, though exactly how the initial check works can vary from one lender to the next.
So if one lender talks about an AIP and another about a DIP, don’t worry that you’re being offered something different. They all refer to the same early-stage indication of what you might be able to borrow.
Why do first-time buyers need a mortgage in principle?
A mortgage in principle shows an estate agent and seller that you’ve thought seriously about how you’ll finance the purchase. It isn’t a legal requirement for making an offer, but some agents may ask to see one when weighing up your position as a buyer, and it helps you stand out from someone who hasn’t yet checked what they can borrow.
It’s useful for you too. It tells you the ballpark figure you can work with, so you’re viewing homes you can actually afford rather than falling for something out of reach. And in a competitive London market, having one ready means you can make an offer the moment the right home comes up, instead of scrambling to sort your finances while another buyer gets in first.
Getting the groundwork right early is a big part of why so many buyers come to us for first-time buyer mortgage advice in London before they start viewing.
How do you get a mortgage in principle?
You can get one directly from a lender or through a mortgage broker. You’ll share some details about your finances, and the lender runs an initial credit check to calculate your indication.
For the mortgage in principle itself, a lender usually asks for information rather than a full set of documents, typically:
- Your income, and how it’s made up if you’re self-employed or on a contract
- How much deposit you have and where it’s come from
- Your regular outgoings and any existing credit commitments
- Your address history, usually going back three years
An adviser may ask to see supporting evidence, such as payslips, accounts, or tax documents, at this stage too, so they can check that the figures being submitted are realistic. Fuller documentary verification usually comes later, as part of the full application.
Going through a broker changes what you get from this stage. Approach one lender directly and you either fit their criteria, or you don’t. A whole-of-market broker compares lenders first and points you towards the ones most likely to say yes to your situation, which counts for a lot if you’re self-employed, on a contract, or have anything out of the ordinary in your income or credit history.
Does a mortgage in principle affect your credit score?
Usually not. Most lenders use a “soft” credit check for a mortgage in principle, which doesn’t affect your credit score and isn’t visible to other lenders. Some lenders, however, use a “hard” check, which does leave a visible mark on your credit file.
It’s important to recognise that the two work differently. A soft search is a light-touch check that only you can see on your file. It has no effect on your score, and you can have as many as you like. A hard search is recorded on your file and can be seen by other lenders. A single hard search is normal and generally less of a concern than making several credit applications in a short period.
This is one of the biggest reasons to use a broker. We’ll know which lenders run soft searches at the mortgage-in-principle stage, so you can get the confidence of an indication without an unnecessary mark on your file. It’s also worth remembering that lenders don’t simply approve mortgages on the credit score you see in an app. They also look at the information on your credit report and apply their own affordability and underwriting criteria.
When you make a full mortgage application later, the lender will typically carry out a full credit check, which is recorded as a hard search. The value of choosing carefully at the mortgage-in-principle stage lies in avoiding an unnecessary hard search before you’re ready to make the full application.
How long does a mortgage in principle last?
Most mortgages in principle are valid for between 30 and 90 days. Ninety days is common, but the exact window varies from lender to lender.
If yours expires before you’ve found a home, you can usually ask the lender or your adviser for an updated one, though your circumstances and the lender’s criteria may need to be checked again. The main thing is to keep it up to date so you’re ready when you find a property you want to make an offer on.
Is a mortgage in principle a guarantee you’ll get the mortgage?
No. A mortgage in principle is an indication, not a formal offer. The lender still needs to complete their full checks before agreeing to lend.
The difference comes down to depth: a mortgage in principle rests on a light check of the figures you’ve given. The full application goes much further: the lender verifies your documents, runs a full credit search, and has the property valued before it commits. Those deeper checks can surface things the initial indication never tested, which is why the final decision occasionally lands differently and why the process has more than one stage.
Can you be declined after a mortgage in principle?
Yes. Giving accurate information at the mortgage-in-principle stage reduces the risk of surprises, but it doesn’t remove them. The full application looks at both your circumstances and the property in much more detail, and a lender can change its position for reasons that have nothing to do with the figures you gave.
Common reasons a full application differs from the initial indication include:
- A change in your income or job since you applied
- New credit commitments taken on in the meantime
- Errors or surprises on your credit file
- The lender’s valuation coming in below the purchase price, which can reduce how much it will lend or mean you need a larger deposit
A broker cuts this risk by pressure-testing your income, deposit and outgoings before anything is submitted, so any problems surface early rather than after you’ve had an offer accepted.
How quickly can you get a mortgage in principle?
Sometimes very quickly. Many lenders can produce a mortgage in principle within minutes to a day, whether you apply directly or through a broker. The value of speaking to an adviser first isn’t the speed itself. It’s that they can assess your circumstances and pinpoint the lenders whose criteria are most likely to suit you before you submit an application.
The bigger question is when to get one.
Aim to have it in place before you start booking viewings, rather than after, so you’re searching with a firm budget, and there’s no holdup if you need to act on a property. Come to us early, and there’s usually plenty of time to get yours sorted before you need it.
Mortgage in principle: quick answers
Does a mortgage in principle affect your credit score? Usually not. Most lenders use a soft credit check that leaves no mark on your credit report. Some use a hard check, so it’s worth going through a broker who knows the difference.
How long does a mortgage in principle last? Typically 30 to 90 days, depending on the lender. If it expires, you can usually ask for an updated one.
Is a mortgage in principle a guarantee? No. It’s an indication of what you may be able to borrow, not a formal mortgage offer.
How quickly can I get one? Sometimes within minutes to a day, whether you apply directly or through an adviser. An adviser’s value is matching you to a suitable lender first, rather than speed alone.
Ready to make your offer with confidence?
A current mortgage in principle helps you approach viewings and offers with a clear understanding of your borrowing position. Our first-time buyer advisers will talk through your budget, help you find a lender that fits, and can often arrange your mortgage in principle the same day. There’s no upfront broker fee, and we’ll explain any fee that may become payable later before you go ahead.
Book a free call, and we’ll get you offer-ready.
AS Financial Ltd is authorised and regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up with your mortgage repayments.
