How Does a Mortgage in Principle Work?

A mortgage in principle (also called an Agreement in Principle, AIP, Decision in Principle, or DIP) is a written statement from a lender saying they would, in principle, lend you up to a specific amount based on a soft credit check and the financial information you've supplied.

It's the first concrete step in buying a home and you'll need one before any estate agent takes you seriously.

What an AIP actually contains

A typical AIP confirms:

  • The maximum amount that lender would lend you
  • For how long it's valid (usually 60–90 days)
  • The lender's name (sometimes "subject to underwriter approval")
  • That a soft credit search was run

It does not lock in:

  • An interest rate
  • A specific product
  • A binding offer to lend

How long it takes

Online: 15 minutes to 1 hour.

In-branch with a high street bank: a same-day appointment, then output within an hour.

With an online broker (Habito, Mojo, Trussle): typically 15 minutes if you've already gathered the info.

What you need to apply

  • Income (gross annual)
  • Bonus / commission / overtime expectations
  • Outgoings (rough monthly)
  • Deposit amount and source
  • Existing debts (credit cards, loans, BNPL)
  • Address history (3 years)
  • ID

What the lender checks

For an AIP, the lender does:

  • A soft credit check (no footprint)
  • A basic affordability assessment
  • An anti-fraud check on your identity

They do not:

  • Verify your income with payslips
  • Verify your deposit source
  • Run a hard credit search
  • Look at the property

That happens at the full application stage.

Why you need one

Three reasons:

  1. Estate agents demand it. No agent in a competitive UK market will let you view, let alone offer on, a property without one.
  2. You'll know your budget. The figure is often higher or lower than your guess.
  3. It signals seriousness to the seller. Sellers prefer offers backed by AIPs over those without.

How long an AIP lasts

Typically 60–90 days. Most lenders let you renew it once, free, with another soft check. After 6 months you'll usually need a fresh one.

If you find a property after the AIP expires, ask the broker to refresh it. Doesn't impact your credit (soft check) and only takes minutes.

Can you get more than one AIP?

Yes — soft checks have no footprint. Many buyers get AIPs from 2–3 lenders to compare maximums. Some lenders are more generous with affordability than others, particularly:

  • Nationwide — strong on FTB schemes
  • Halifax — flexible on bonus income
  • Skipton — stronger on contractor / self-employed
  • Specialist lenders — better on adverse credit or unusual income

A whole-of-market broker will run several lenders' affordability calculators and tell you which is most generous for your circumstances.

Does an AIP guarantee the mortgage?

No. It's an indication, not a binding offer. Things that can change between AIP and full offer:

  • Your income changes (bonus drops, you change jobs)
  • New debts appear on your credit file
  • You lied or omitted on the AIP and the truth surfaces
  • The property fails the lender's valuation
  • The lender's appetite shifts

In practice, 80–90% of AIPs convert to formal offers if you're honest about your circumstances and your situation doesn't change. The 10–20% that fail tend to fall on:

  • Bank statements showing different income or unusual outflows
  • Undisclosed debts (Klarna, gambling, recent credit applications)
  • Property issues

Soft credit check vs hard credit check

Check Footprint Use
Soft None AIPs, eligibility checkers, quotes
Hard Yes (12 months visible) Full mortgage application, new credit cards, loans

Multiple soft checks: harmless. Multiple hard checks in 6 months: looks like financial distress and lowers lender appetite.

So: shop AIPs freely, but only do one full application at a time.

Common AIP pitfalls

  • Putting unrealistic income. The full app verifies it — be accurate.
  • Hiding debts. Lenders will see them anyway in the credit check.
  • Forgetting overtime / bonuses. These often boost your borrowing — include them with documentation.
  • Treating it as binding. It's not. Don't tell the estate agent the AIP is a guaranteed offer.
  • Taking on new credit after the AIP. That £18,000 PCP car loan you took the week after AIP can torpedo the full application.

What happens after AIP?

Once an offer on a property is accepted, you (or your broker) submit the full mortgage application to the lender that issued the AIP — or to a different one if their actual rates are better. Read How long does mortgage approval take? for what happens next.

Get a free mortgage quote — most online brokers issue an AIP within 15 minutes.

Frequently asked questions

Does an AIP affect my credit score? No — only soft checks are involved.

Can I get an AIP if I'm self-employed? Yes, but the lender will ask for accounts at the full application stage. AIP is just the affordability indicator.

How long does it take to get an AIP? 15 minutes online with most lenders or brokers. Same day even by appointment.

What if my AIP is for less than I want to borrow? Try other lenders — affordability calculations vary. A broker will identify the most generous lender for your profile. Read How much can I borrow for a mortgage?.

Can I make an offer without an AIP? Technically yes, but the agent will almost certainly require one before the offer is presented to the seller.

Does an AIP commit me to that lender? No — you can use a completely different lender for the full mortgage application.

This article is for informational purposes only and does not constitute financial advice. Always consult a qualified mortgage adviser before making a decision.