If you’re starting your home-buying journey, you’ve probably come across the term Mortgage Agreement in Principle (sometimes called a Decision in Principle (DIP) or Mortgage in Principle (MIP)).

But what exactly is it, do you need one, and does it mean your mortgage has been approved?

In this guide, we’ll explain everything you need to know about a Mortgage Agreement in Principle, including how it works, how long it lasts and why it’s often one of the first steps towards buying a home.

What is a Mortgage Agreement in Principle?

A Mortgage Agreement in Principle (AIP) is an indication from a mortgage lender that they may be willing to lend you a certain amount of money, based on the information you’ve provided.

It’s not a mortgage offer and it isn’t legally binding, but it can give you confidence about your budget before you start viewing properties.

Think of it as a useful first step that helps answer the question:

“How much could I borrow?

Why do I need an Agreement in Principle?

An Agreement in Principle can make your home-buying journey much smoother.

It can help you:

• Understand what you may be able to borrow.
• Set a realistic property budget.
• Show estate agents and developers you’re a serious buyer.
• Strengthen your position when making an offer.
• Spot any potential issues before submitting a full mortgage application.

Many estate agents and new build developers will ask whether you already have an Agreement in Principle before accepting an offer or reserving a property.

Does an Agreement in Principle guarantee I’ll get a mortgage?

No.

This is one of the biggest misconceptions.

An Agreement in Principle is based on the information available at the time. Before issuing a formal mortgage offer, the lender will still carry out a full assessment.

This usually includes:

• Verifying your income.
• Checking your documents.
• Reviewing your bank statements.
• Carrying out a property valuation.
• Completing affordability and credit checks.

As long as your circumstances haven’t changed and all the information provided is accurate, an Agreement in Principle is a positive first step—but it shouldn’t be viewed as a guarantee.

Does getting an Agreement in Principle affect my credit score?

It depends on the lender.

Some lenders carry out a soft credit search, which won’t affect your credit score.

Others may complete a hard credit search, which can leave a footprint on your credit file.

A mortgage advisor can help identify which lenders use soft searches where appropriate and explain any impact before an application is made.

How long does an Agreement in Principle last?

Most Agreements in Principle are valid for between 30 and 90 days, although this varies from lender to lender.

If it expires before you’ve found a property, it can usually be renewed, provided your circumstances haven’t changed.

What information will I need?

The exact requirements vary, but you’ll usually be asked about:

• Your income.
• Your employment.
• Your monthly commitments.
• Your deposit.
• The type of property you’re hoping to buy.
• Your address history.

Having accurate information helps ensure the Agreement in Principle reflects your circumstances as closely as possible.

Should I get an Agreement in Principle before viewing houses?

In many cases, yes.

Knowing your budget before you start viewing properties can save time and help you focus on homes that are realistically within your price range.

It can also put you in a stronger position if you find the right property and want to make an offer quickly.

What happens after I receive my Agreement in Principle?

Once you’ve found a property and your offer has been accepted, the next step is submitting a full mortgage application.

At this stage, your lender will:

• Request supporting documents.
• Carry out a full affordability assessment.
• Arrange a property valuation.
• Review your application in more detail.
• Decide whether to issue a formal mortgage offer.

This is where having the right guidance can make the process much less stressful.

The bottom line

A Mortgage Agreement in Principle is one of the best ways to start your home-buying journey. It helps you understand your budget, gives sellers confidence that you’re a serious buyer and can make the buying process much smoother.

While it doesn’t guarantee you’ll receive a mortgage, it provides a solid foundation before submitting a full application.

If you’re thinking about buying your first home, moving house or purchasing a new build, we’d be happy to help you arrange an Agreement in Principle and explain the next steps, so you can begin your property search with confidence.