Mortgage in Principle Explained, What It Is and How to Get One

What is a Mortgage in Principle?

A mortgage in principle (MIP), also called an agreement in principle (AIP) or decision in principle (DIP), is a written statement from a lender indicating how much they would be prepared to lend you, based on an initial assessment of your income, outgoings, and credit history.

It is not a formal mortgage offer and it does not guarantee you will receive that amount. It is a preliminary indicator, subject to full application, valuation, and underwriting. However, most estate agents and sellers treat it as strong evidence that you are a serious, finance-ready buyer.

Why You Need One Before Making an Offer

Most estate agents will ask to see a mortgage in principle before accepting an offer, particularly in competitive markets. Without one, your offer is more likely to be overlooked in favour of buyers who have already confirmed their borrowing position.

A mortgage in principle also helps you:

• Set a realistic budget before beginning your property search
• Move quickly when you find the right property
• Demonstrate credibility to sellers, which can be particularly important in multiple-offer situations
• Identify potential credit issues before they arise mid-transaction

Soft vs Hard Credit Checks

This distinction matters. When you apply for a mortgage in principle, the lender carries out either a soft credit check or a hard credit check depending on their process.

Multiple hard checks within a short period can signal financial stress to lenders and may affect your full application. Where possible, clarify with the lender which type of check they carry out before applying. Many high street banks and building societies now use soft checks for their initial MIP assessments.

What Lenders Assess

To issue a mortgage in principle, a lender will typically request:

• Your name, address history (usually three years), and date of birth
• Employment status and annual income (employed, self-employed, or contractor)
• Monthly outgoings including existing credit commitments
• The deposit amount you intend to put forward
• The approximate purchase price you are targeting

They will cross-reference this against their current affordability criteria. Since the Mortgage Market Review (2014), lenders are required to assess affordability in detail, including stress-testing your ability to repay if interest rates rise.

How Long a Mortgage in Principle Lasts

Most mortgage in principle certificates are valid for 60–90 days. If yours expires before you find a property, you can typically renew it, though the lender may carry out another credit check. Check the expiry date on your certificate and factor this into your property search timeline.

Does a MIP Guarantee a Mortgage?

No. A mortgage in principle is subject to:

• A satisfactory full mortgage application and income verification
• An acceptable mortgage valuation of the specific property
• No material change in your financial circumstances between the MIP and full application
• The property meeting the lender's acceptable property criteria

Lenders can and do decline full applications even where a MIP was issued. This is why it is important to be entirely honest during the MIP process, inconsistencies between your MIP information and your full application documents are a common cause of problems.

Getting a Mortgage in Principle

You can apply directly with a lender or through a mortgage broker. Using an independent, whole-of-market broker is generally recommended for first-time buyers because brokers can identify which lenders are most likely to accept your application, reducing the risk of unnecessary credit checks. The Financial Conduct Authority regulates mortgage advice in the UK.

Once you have a mortgage in principle in place, you can search properties with confidence. You can check sold price history and property data by postcode on Property Passport UK to calibrate whether asking prices are realistic in your target area.