What is a mortgage Agreement in Principle (AIP)?

A mortgage Agreement in Principle (AIP) is a written indication from a lender of how much it may be prepared to lend you, based on an initial assessment of the information you provide.

It’s sometimes called:

Decision in Principle (DIP)
Mortgage in Principle
Lending in Principle

They all mean broadly the same thing.

An Agreement in Principle is not a full mortgage offer, but it’s an important early step if you’re planning to buy a property.

What does an Agreement in Principle show?

An Agreement in Principle usually gives you:

An indication of how much the lender may be prepared to lend
An initial indication that the information you’ve provided fits the lender’s preliminary criteria
A clearer idea of your potential mortgage borrowing before you make a full application

The lender may also carry out a credit search at this stage. Whether that is a soft or hard search depends on the lender.

Estate agents may ask to see an AIP, and having one can help show a seller that you’ve already considered how you’ll finance the purchase. It is not a guarantee that the mortgage will ultimately be approved.

If you’re going for a first-time buyer mortgage, having an AIP can make your offer stronger compared to someone who hasn’t arranged one.

Is an Agreement in Principle a guarantee?

No.

This is one of the most important things to understand.

An Agreement in Principle is based on the information you provide at the time. When you submit a full mortgage application, the lender will carry out:

A full credit check
Detailed affordability assessment
Document checks (payslips, bank statements, tax returns)
A valuation of the property

If anything changes or doesn’t match the original information, the lender can reduce the loan amount or decline the application.

Think of an Agreement in Principle as a green light to start house hunting — not a legally binding promise.

	Agreement in Principle	Mortgage offer
Purpose	Early indication of potential borrowing	Formal offer for a mortgage
Assessment	Based on initial information and checks	Full application, evidence and underwriting
Property	Usually obtained before you have a specific property	Normally relates to the property being purchased
Guaranteed?	No	Formal offer, subject to its conditions
Next step	House hunting or making an offer	Progressing towards exchange and completion

How does an Agreement in Principle work?

The process is usually straightforward.

You’ll provide details such as:

Income (salary, bonuses, self-employed income)
Monthly outgoings
Existing debts
Mortgage deposit amount
Employment status
Basic personal details

The lender will then assess affordability using their criteria and run either a soft or hard credit check.

If the lender can give you an AIP, it will provide an indication of how much it may be prepared to lend.

Some lenders can provide an online decision quickly, although the process and timing vary.

If you’re still working out your budget, our mortgage affordability calculator can give you an early estimate before you request an AIP.

Does an Agreement in Principle affect my credit score?

It depends on the lender.

There are two types of credit checks:

Soft credit check

Doesn’t leave a visible footprint for other lenders
Doesn’t impact your credit score
Used by many lenders for AIPs

Hard credit check

Leaves a visible mark on your credit file
Can slightly impact your score
Some lenders still use this for AIPs

Before requesting several AIPs, check whether each lender uses a soft or hard credit search. Soft searches do not affect your credit score or appear to other lenders, while repeated hard searches can affect your credit profile.

A broker can help manage this and avoid unnecessary credit searches.

How long does an Agreement in Principle last?

Agreements in Principle are typically valid for around 30 to 90 days, although the exact period depends on the lender.

If it expires, you can usually renew it, provided your circumstances haven’t changed.

If your income, job, debts or credit profile changes, it’s important to update your details before proceeding.

When should I get an Agreement in Principle?

You should consider getting one:

Before viewing properties seriously
Before making an offer
If an estate agent requests proof of affordability
When you want clarity on your budget

It helps avoid disappointment. There’s little point falling in love with a £400,000 property if a lender is only willing to lend £320,000.

An AIP sets realistic expectations early.

Do I need an Agreement in Principle to make an offer?

Technically, no. But in practice, often yes.

No. An Agreement in Principle is not a legal requirement for making an offer on a property.

However, an estate agent may ask how you plan to fund the purchase, and some may ask to see an AIP. Having one can also help demonstrate to the seller that you’ve already explored your mortgage options.

GOV.UK’s home-buying guidance recommends letting the seller know if you have a Decision in Principle when making an offer.

What if I’m self-employed?

If you’re self-employed, you can still get an Agreement in Principle, but the income used can depend on how you trade and the lender’s criteria.

A lender may consider:

How long you’ve been trading
Sole-trader or partnership profits
Salary and dividends for company directors
Company net profit at some lenders
Contract income for some contractors

The amount used can also depend on how your income has changed over recent years.

Some lenders are more flexible than others. If you only have one year of accounts, choice may be more limited.

What if I have bad credit?

It may still be possible to get an Agreement in Principle if you have past credit issues such as:

Defaults
CCJs
Missed payments

However:

The deposit required may be higher
The interest rate may be higher
Fewer lenders may be available

Be honest when entering your details. Incorrect information is one of the most common reasons full applications are later declined.

What happens after an Agreement in Principle?

Once your offer on a property is accepted, the next step is to submit a full mortgage application.

At that stage, the lender will:

Request supporting documents
Carry out a full credit check
Arrange a property valuation
Underwrite the case

If everything checks out, they’ll issue a formal mortgage offer.

Only at that stage is the lender committing to the loan, subject to conditions.

Can my Agreement in Principle amount change?

Yes.

The final loan amount may change if:

Interest rates move
Your circumstances change
The property valuation is lower than expected
The lender’s criteria change

That’s why it’s important not to stretch your budget right up to the maximum shown on your AIP.

Can a mortgage be declined after an Agreement in Principle?

Yes. An Agreement in Principle is only an initial indication, so a lender can still reduce the amount or decline the full mortgage application.

This could happen if:

The documents you provide do not support the information given at AIP stage
Your income, debts or other circumstances change
Further credit checks reveal information that affects the application
The property does not meet the lender’s criteria
The application does not pass the lender’s full affordability or underwriting checks

This does not necessarily mean another lender will reach the same decision, because criteria vary.

Is an Agreement in Principle free?

Getting an Agreement in Principle directly from a lender is usually free.

If you use a mortgage broker or adviser, they may charge a fee for their advice or service, so check this before proceeding. An AIP does not usually commit you to taking a mortgage with the lender that provided it.

[FAQ]

Frequently asked questions

Is a Decision in Principle the same as an Agreement in Principle?

Usually, yes. Decision in Principle, Agreement in Principle and Mortgage in Principle are different names lenders use for broadly the same type of initial mortgage assessment.

Can I get more than one Agreement in Principle?

Yes, although you should check whether each lender uses a soft or hard credit search before making several applications. Multiple soft searches won’t affect your credit score, but repeated hard searches can.

Can I change lender after getting an Agreement in Principle?

Yes. Getting an AIP from one lender does not normally mean you have to make your full mortgage application with that lender. GOV.UK explicitly says a Decision in Principle from one provider does not oblige you to use them.

What happens if my Agreement in Principle expires?

You can normally request another one. The lender will reassess your circumstances using its criteria at that time.