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A mortgage agreement in principle (AIP) is a lender’s early estimate of how much it might lend you, based on information you provide. It can help you set a realistic house-hunting budget and show an estate agent or seller that you have explored your financing.
It is not a mortgage offer, a guarantee that you will be approved, or a legal requirement before making an offer on a property. The lender can change its view after checking your evidence and assessing the property you want to buy.
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What is a mortgage agreement in principle?
An agreement in principle is an initial, conditional indication from a mortgage lender of the amount it might be willing to lend. You may also see the same process called a mortgage in principle or a decision in principle. MoneyHelper describes it as a written document stating how much a lender might be willing to lend, rather than a final lending decision (MoneyHelper, updated 11 March 2025).
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An AIP is different from a mortgage offer
| Stage | What the lender has usually considered | What it tells you |
|---|---|---|
| Agreement in principle | Initial information supplied by you; the lender’s early affordability and eligibility checks | An indicative maximum or range that may be available if later checks are satisfactory |
| Full mortgage application | Detailed evidence about your finances and an assessment of the property | Whether the lender is prepared to progress the application for that particular purchase |
| Mortgage offer | Completed underwriting and property checks under the lender’s process | The lender’s formal offer for the proposed mortgage; an earlier AIP does not ensure that this stage will be reached |
The exact checks at each stage differ between lenders. An AIP therefore cannot promise a rate, term, product or final loan amount.
Why first-time buyers obtain an AIP
It sets a sensible search ceiling
Knowing an indicative borrowing figure, alongside the deposit you have available, helps you avoid viewing properties that are unlikely to fit your financing. Use the AIP as one input to a sustainable budget. Do not assume that spending up to the stated maximum is affordable: leave room for changes in income, regular bills, interest rates, and the costs of owning and moving into a home.
The lender’s figure is not your complete purchase budget. You still need to account for your deposit and costs connected with buying, moving and running the property. The guidance reviewed for this article does not establish standard amounts for those costs, so calculate them for your own circumstances rather than applying a universal percentage.
It can reassure an agent or seller
In a competitive market, an agent or seller may view an AIP as evidence that you have discussed borrowing with a lender or adviser. It can make your offer easier to assess alongside other offers. That reassurance is practical rather than legal: an AIP does not make your offer binding and does not give the seller a promise that your mortgage will be approved.
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It is not legally required to make an offer
UK buyers can make an offer without first obtaining an AIP. MoneyHelper and Which? present it as useful preparation, not a statutory prerequisite. An agent may have its own process for checking that a prospective buyer is financially prepared, but that is different from a legal requirement to hold an AIP.
Information to prepare before requesting one
Lenders and brokers commonly ask for the following information. Their forms and evidence requirements vary, so check the list for the provider you choose.
- Proof of identity and your current personal details.
- Your address history for the previous three years.
- Income information, including the way you are paid and any additional income the lender asks you to declare.
- Regular spending, commitments and debts so affordability can be assessed.
- The size and source of your deposit.
- Details of any other information the lender’s application specifically requests.
Give accurate, consistent figures. An estimate that omits a regular commitment can produce an unrealistic AIP and create problems when the lender checks your full application.
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Will an AIP affect your credit score?
There is no single rule for every provider. Some AIP processes use a soft search; others use a hard search. Ask the specific lender or broker which type will be used before you submit your details, especially if you are considering applications with several providers.
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Soft search
A soft search is generally used for an initial indication and is not visible to other lenders in the same way as a hard application search. It is still important to confirm the provider’s description, because terminology and processes differ.
Hard search
A hard search is recorded on your credit file and can be visible to other lenders. Multiple hard searches in a short period may influence how a future lender views your applications. That is why you should establish the search type before requesting several AIPs rather than assuming that every AIP is harmless to your file.
Questions to ask before pressing submit
- Will this request use a soft search or a hard search?
- How will the search appear on my credit file, and who can see it?
- Will the lender use the information only for an AIP or also to begin a full application?
- How long will the AIP remain valid?
- Is there a fee for this service?
Getting an AIP directly or through a broker
You can approach a lender yourself or use a mortgage broker. Neither route is universally better; the useful choice depends on how widely you want to compare lenders, how complex your circumstances are, and whether you want help interpreting criteria.
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| Route | What it can provide | Points to check |
|---|---|---|
| Direct with a lender | A decision based on that lender’s own products and criteria | You may need to research other lenders separately; confirm the search type, validity and any charge before applying |
| Mortgage broker | A broker can suggest lenders and deals that may fit the information you provide (Which?) | Ask which lenders the broker considers, whether the service covers your circumstances, what credit search will be used, and whether a fee applies; MoneyHelper notes that some brokers charge |
If you use a broker or another mortgage advice firm, check that it is authorised for the service it is providing. The Financial Conduct Authority’s Firm Checker, updated 22 September 2026, allows consumers to check a firm’s status and permissions, including permissions relevant to residential mortgages and credit broking.
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How the process works: from preparation to purchase
- Set out your figures. Gather identity details, three years of addresses, income, spending, debts and deposit information. Use current figures rather than a hoped-for future pay rise or an unconfirmed bonus.
- Choose your route. Decide whether to contact a lender directly or ask a broker to consider providers. If using a broker, establish the lender range and any fee before authorising an application.
- Confirm the credit-search policy. Ask whether the AIP uses a soft or hard search and how it will be recorded. Do this before making requests with multiple providers.
- Submit the AIP request. Complete the form consistently and disclose the commitments the lender asks about. The provider may return an indicative borrowing amount, conditions or a refusal at this preliminary stage.
- Read the document carefully. Check the name of the lender, the indicative amount, any assumptions or conditions, the search type if stated, the expiry date and any fee. Keep a copy for your records.
- Use the figure to search. Combine the indicative mortgage with your deposit and a separate allowance for purchase and ownership costs. Keep your personal ceiling below the lender’s maximum if that is what your monthly budget requires.
- Make an offer when you find a suitable property. You can make an offer without an AIP, but showing one may reassure an agent or seller. An AIP does not commit the lender to lend on that property.
- Submit the full mortgage application. Once you have a property in view or an offer accepted, provide the detailed evidence requested by the lender. It will assess your finances and the property before deciding whether to issue a mortgage offer.
- Respond to further questions. The lender may ask for additional documents or clarification. A satisfactory AIP does not remove these later checks, and the lender can still decline the full application.
What happens after an AIP?
The full application is tied to both you and a specific property. The lender verifies the financial information rather than relying only on the estimates used for the AIP, and it assesses whether the property meets its lending requirements. This is why an AIP can be followed by a different borrowing figure, extra conditions or a refusal.
Why a lender might not proceed
- The evidence supplied at full application does not match the initial information.
- Affordability changes after detailed income, spending or debt checks.
- The property’s value or characteristics do not satisfy the lender’s criteria.
- Your circumstances or the lender’s criteria have changed since the AIP was issued.
An AIP is therefore useful for planning but not protection against a declined application. Do not commit to irreversible costs on the assumption that the indicative figure guarantees completion.
How long does a mortgage in principle last?
MoneyHelper says an AIP is typically valid for 30 to 90 days. That is a general guidance range, not a universal term. The expiry date and conditions on your own document control. If it expires before you find a property, ask the lender or broker whether it can be renewed and whether a new credit search will be carried out.
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Does an AIP cost anything?
MoneyHelper says AIPs are usually free, although some brokers may charge for their service. Ask for the fee, when it becomes payable and whether it is refundable before proceeding. A fee does not turn an AIP into a guarantee, so assess the service separately from the indicative borrowing figure.
Common first-time-buyer mistakes
Calling the figure an approval
Use “indicative borrowing” or “agreement in principle”, not “approved mortgage”. The wording matters when you explain your position to an agent and when you plan your finances.
Assuming every AIP uses a soft search
Search practice varies. Confirm the policy in writing or in the provider’s explanation before applying to more than one lender.
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A lender’s maximum is not a recommendation for what you should spend. Build a budget around the payment you can sustain and the other costs of buying and owning the home.
Ignoring the expiry date
Check the date as soon as you receive the document. An expired AIP may need to be refreshed, possibly with another search.
Skipping checks on a broker
Before sharing financial information or paying a fee, use the FCA Firm Checker to confirm the firm’s authorisation and relevant permissions.
Questions to ask your lender or broker
- What amount is indicated, and what assumptions produced it?
- Is the figure a maximum, a range or an amount subject to conditions?
- Will you carry out a soft or hard credit search?
- How long is the AIP valid, and what happens when it expires?
- What documents will you need for the full application?
- Could the property type, condition or value affect the eventual decision?
- Are there any broker or application fees, and when are they due?
For a UK first-time buyer, an AIP is best understood as an early budgeting and house-hunting tool. It can show what a lender might lend and help demonstrate preparation to a seller, but only the full application and property assessment can determine whether a mortgage offer is made.
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